
Class 
Book. 



COPYRIGHT DEPOSIT 



THE 

ECONOMIC INTERPRETATION 
OF HISTORY 



BY 



EDWIN R. A. SELIGMAN 

PROFESSOR OF POLITICAL ECONOMY AND FINANCE 

COLUMBIA UNIVERSITY, NEW YORK 

PRESIDENT OF THE AMERICAN ECONOMIC ASSOCIATION 

CORRESPONDING MEMBER OF THE RUSSIAN 

IMPERIAL ACADEMY OF SCIENCE 

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PREFATORY NOTE 

The present work is substantially a reproduction, 
with some alterations, additions and rearrangements, 
of the articles that appeared in Volumes XVI and 
XVII of the Political Science Quarterly. The re- 
quests for reprints were so numerous that it seemed * 
best to meet the demand by giving to the essays a 
more permanent form. May the treatment of the 
subject in the following pages lead to the fuller 
discussion which so important a topic deserves at 
the hands of economists, historians and philosophers 
alike. 

Columbia University. 
New York, May, 1902. 



CONTENTS 



INTRODUCTION 

PAGE 

Statement of the Thesis i 



PART I 

HISTORY OF THE THEORY OF ECONOMIC 
INTERPRE TA TION 

CHAPTER I 
The Early Philosophy of History 7 

The eighteenth century — Lessing, Herder, Ferguson, Kant 
— The idealistic, the religious, the political interpretation — 
The physical interpretation — Vico, Montesquieu, Buckle. 

CHAPTER II 
Philosophical Antecedents of the Theory . . .16 

Hegel — The dialectical method and the system — The 
Young-Hegelians — Feuerbach, Griin and Hess. 

CHAPTER III 
Genesis and Development of the Theory .... 25 

Karl Marx as a political reformer — The Rheinische Zei- 
tung — The Deutsch-Franzosische Jahrbucher — Marx and 
Ruge — Engels — The Holy Family — Proudhon — The 
Misery of Philosophy — Marx as an economist — The Mani- 
festo of the Communist Party — The American journals — 
The Criticism of Political Economy — Capital, 
vii 



viii CONTENTS 

CHAPTER IV 

PAGE 

The Originality of the Theory 50 

The seventeenth century — Harrington — The eighteenth 
century — Dalrymple, Moser, Gamier — The nineteenth cen- 
tury — The French socialists — Fourier, St. Simon, Proudhon 
and Blanc — The Germans — Stein, Rodbertus, Lassalle. 

CHAPTER V 
The Elaboration of the Theory 57 

Technique in social life — Economic and physical factors 
— Physical and psychical actions and reactions. 

CHAPTER VI 
Recent Applications of the Theory 68 

Marx — Morgan — Engels — Kovalevsky — Grosse — 
Hildebrand — Cunow — Nieboer — Loria — Ciccotti — 
Francotte — Pohlmann — Des Marez — Lamprecht. 

PART II 

CRITICISM OF THE THEORY OF ECONOMIC 
INTERPRE TA TION 

CHAPTER I 
Freedom and Necessity 89 



The doctrine of determinism — The theory of social environ- 
ment — The great man theory — Moral fatalism. 

CHAPTER II 
Historical Law and Socialism 



What is a scientific law ? — The laws of social science — 
Historical laws — Econoinic interpretation independent of 
socialism — The general theory and its special applications. 



CONTENTS ix 



CHAPTER III 

PAGE 

The Spiritual Factors in History . . . . .112 
Ethics as a social product — Sin, crime and tort — Indi- 
vidual and social morality — The categorical imperative — 
Idealism and materialism — The relation of moral to eco- 
nomic forces. 

CHAPTER IV 

Exaggerations of the Theory 135 

Loria — Economics and religion — Economics and phi- 
losophy — Other exaggerations — Patten and Adams ■ — Dis- 
avowal by Engels. 

CHAPTER V 

Truth or Falsity of the Theory i4( 

The facts of mentality — Economic life as antecedent to 
the mental life — Social phenomena as a reflex of economic 
phenomena — Economic interpretation in its proper formu- 
lation. 

CHAPTER VI 

Final Estimate of the Theory i5< 

The monistic explanation untenable — The importance of 
economic interpretation to economics and history alike — 
The historical school in economics — The economic school 
in history — Conclusion. 



INTRODUCTION 

STATEMENT OF THE THESIS 

To the student of the social sciences it is 
interesting to observe the process by which, in 
one respect at least, we are drifting back to the 
position of bygone ages. Although Aristotle 
pointed out the essential interrelation of poli- 
tics, ethics and economics, modern thought has 
successfully vindicated the claims of these disci- 
plines, as well as of others, such as jurispru- 
dence and the various divisions of public law, 
to be considered separate sciences. For a long 
time, however, to the common detriment of all, 
the independence of each was so emphasized 
and exaggerated as to create the serious danger 
of forgetting that they are only constituent 
parts of a larger whole. The tendency of 
recent thought has been to accentuate the rela- 
tions rather than the differences, and to explain 
the social institutions which form the bases of 
the separate sciences in the light rather of a 
synthesis than of an analysis. This method 



2 ECONOMIC INTERPRETATION 

has been applied to the record of the past, as 
well as to the facts of the present; the con- 
ception of history has been broadened until 
it is now well recognized that political history- 
is only one phase of that wider activity which 
includes all the phenomena of social life. If 
the term " politics " is used in the common but 
narrow sense of constitutional and diplomatic 
relations, then to repeat the familiar dictum, 
" History is past politics," is to utter a half- 
truth, in lamentable disregard of these newer 
ideas. 

While, however, it is now conceded that the 
history of mankind is the history of man in 
society, and therefore social history in its 
broadest sense, the question has arisen as to 
the fundamental causes of this social develop- 
ment — the reason of these great changes in 
human thought and human life which form the 
conditions of progress. No more profound and 
far-reaching question can occupy our attention ; 
for upon the correct answer depends our whole 
attitude toward life itself. It is the supreme 
problem not only to the scientist, but to the 
practical man as well. Of this problem one 
solution has been offered which during the past 
few decades has been engaging the lively atten- 



INTRODUCTION 3 

tion of thinkers not alone in Germany, where 
the theory originated, but in Italy, Russia and, 
to some extent, in England and France. The 
echoes of the controversy have scarcely reached 
our shores ; but a movement of thought at once 
so bold and so profound cannot fail to spread 
to the uttermost limits of scientific thought and 
to evoke a discussion adequate to the nature of 
the problem and the character of the solution. 

We may state the thesis succinctly as 
follows: The existence of man depends upon 
his ability to sustain himself; the economic 
life is therefore the fundamental condition of 
all life. Since human life, however, is the life 
of man in society, individual existence moves 
within the framework of the social structure 
and is modified by it. What the conditions 
of maintenance are to the individual, the similar 
relations of production and consumption are to 
the community. To economic causes, there- 
fore, must be traced in last instance those 
transformations in the structure of society which 
themselves condition the relations of social 
classes and the various manifestations of social 
life. 

This doctrine is often called " historical ma- 
terialism," or the " materialistic interpretation 



4 ECONOMIC INTERPRETATION 

of history." Such terms are, however, lacking 
in precision. If by materialism is meant the 
tracing of all changes to material causes, the 
biological view of history is also materialistic. 
Again, the theory which ascribes all changes 
in society to the influence of climate or to the 
character of the fauna and flora is materialistic, 
and yet has little in common with the doctrine 
here discussed. The doctrine we have to deal 
with is not only materialistic, but also economic 
in character; and the better phrase is not the 
"materialistic interpretation," but the "economic 
interpretation " of history. In France it has 
become the fashion to call the theory " economic 
determinism " ; but this is still more objection- 
able for the reason that it begs the question as 
to whether there is anything really "determi- 
nistic" or fatalistic about the doctrine. This 
point will be fully discussed hereafter. 1 

In the following pages an attempt will be 
made to explain the genesis and development 
of the doctrine, to study some of the applica- 
tions made by recent thinkers, to examine the 
objections that may be advanced and, finally, to 
estimate the true import and value of the 
theory for modern science. 

1 See part ii, chapter i. 



PART I 

HISTORY OF THE THEORY OF ECONOMIC 
INTERPRETATION 



CHAPTER I 

THE EARLY PHILOSOPHY OF HISTORY 

Few of the leading writers of the eighteenth 
or the first half of the nineteenth century 
devoted much attention to the problem of his- 
torical causation. The historians were for the 
most part content to describe the facts of 
political and diplomatic history ; and, when 
they sought for anything more than the most 
obvious explanation of the facts, they generally 
took recourse to the " great man " theory or to 
the vague doctrine of the " genius of the age." 
Even the Nestor of modern historical writing, 
Ranke, attempted scarcely more than to unravel 
the tangled skein of international complications 
by showing the influence of foreign politics 
upon national growth. 

While most of the historians gave evidence 
of only a slight philosophical equipment, the 
philosophers presented a " philosophy of his- 
tory " which sometimes showed scarcely more 
familiarity with history. That Rousseau was 

7 



8 ECONOMIC INTERPRETATION 

not a profound historical scholar, is to put it 
mildly. Others, like Lessing in his Education 
of Humanity 1 and Herder in his Ideas on the 
Philosophy of History? were too much under 
the domination of the theistic conception to 
give much impetus to a newer movement of 
thought, even though Herder in Germany, like 
Ferguson 3 in Scotland, may be called in some 
respects a forerunner of modern anthropological 
investigations. Huxley, as well as many of the 
German writers, 4 has pointed out that Kant in 
his Idea of a Universal History ' 5 anticipated 
some of the modern doctrines as to the evolu- 
tion of society; but even Kant was not suf- 
ficiently emancipated from the theology of the 
age to take a strictly scientific view of the 
subject. With Hegel's Philosophy of History 
we reach the high-water mark of the " idealistic " 
interpretation ; but the Hegelian conception of 
the " spirit of history " has shown itself at once 
too subtle and too jejune for general acceptance. 
A second but less comprehensive attempt to 

1 Die Erziehung des Menschengeschlechts. 

2 Ideen zur Philosophic der Geschichte der Menschheit. 

3 Essay on the History of Civil Society (1767). 

4 Woltmann, Der Historische Materialismus (1900), pp. 17-21. 
6 Idee zn einer Allgemeinen Geschichte in Weltburgerlicher 

Absicht (1784). 



EARLY PHILOSOPHY OF HISTORY 9 

interpret historical growth in terms of thought 
and feeling was made by those who maintained 
that religion is the keynote of progress. That 
each of the five great religions has exerted a 
profound influence on human development is 
indubitable — Judaism typifying the idea of duty; 
Confucianism, of order; Mohammedanism, of 
justice ; Buddhism, of patience ; and Christian- 
ity, of love. But, entirely apart from the fact 
that this explanation overlooks the possibility 
of regarding religion as a product rather than a 
cause, no light is thrown on the question why 
the retention of the same religion is often 
compatible with the most radical changes in 
the character and condition of its devotees. 
The religious interpretation of history, even in 
the modified form of Mr. Benjamin Kidd's 
theory, has found but few adherents. 

A third explanation, which can be traced to 
Aristotle and which has met with some favor 
among publicists, might be called the political 
interpretation of history. It holds, substan- 
tially, that throughout all history there can be 
discerned a definite movement from monarchy 
to aristocracy, from aristocracy to democracy, 
and that there is a constant progress from abso- 
lutism to freedom, both in idea and in institu- 



io ECONOMIC INTERPRETATION 

tion. But very many philosophers, including 
Aristotle himself, have pointed out that democ- 
racy might lead to tyranny; and modern an- 
thropology has tended to discredit the existence 
of the first alleged step. Above all, it has 
been repeatedly shown that political change is 
not a primary, but a secondary, phenomenon ; 
and that to erect into a universal cause what is 
itself a result is to put the cart before the horse. 

With the failure of all these attempts of a 
more or less idealistic nature, the way was pre- 
pared for an interpretation of history which 
would look to physical, rather than to psychical, 
forces ; or rather, which would explain how the 
psychical forces, into which all social movement 
may be analyzed, are themselves conditioned by 
the physical environment. The name with which 
this doctrine is associated is that of Buckle. 

The theory pf the*, predominant influence of 
the external world on human affairs can be 
traced to many writers of the eighteenth cen- 
tury, of whom Vico 1 and Montesquieu 2 are 

1 In his Principii di una Scienza Nuova d" 1 intorno alia Comune 
Natura delle Nazioni (1725). As to Vico, see Huth, Life of 
Buckle, I, pp. 233 et seq. Buckle says of Vico that, " though his 
Scienza Nuova contains the most profound views on ancient 
history, they are glimpses of truth rather than a systematic inves- 
tigation of any one period." 2 In his Esprit des Lois. 



EARLY PHILOSOPHY OF HISTORY n 

easily the most famous. 1 Buckle himself had 
no small opinion of Montesquieu's merits. He 
tells us 2 that Montesquieu " knew what no his- 
torian before him had even suspected, that in 
the great march of human affairs, individual 
peculiarities count for nothing. ... He effected 
a complete separation between biography and 
history, and taught historians to study, not the 
peculiarities of individual character, but the 
general aspect of the society in which the pecu- 
liarities appeared." Furthermore, we are told, 
Montesquieu "was the first who, in an inquiry 
into the relations between the social condition 
of a country and its jurisprudence, called in the 
aid of physical knowledge in order to ascertain 
how the character of any given civilization is 
modified by the action of the external world." 

What Montesquieu, however, stated aphor- 
istically and on the basis of the imperfect 
physical science of the day, Buckle first worked 
out philosophically and with such wealth of 
illustration that he is properly regarded as the 

1 In a complete catalogue of writers who in some way in- 
fluenced Buckle there ought to be included not only Holbach, 
Helvetius and Cabanis, but for the early period Bodin, with his 
theory of climates, and still farther back even Aristotle. 

2 History of Civilisation in England, 1857, pt. ii, ch. vi (pp. 
316-317 of edition of 1873). 



12 ECONOMIC INTERPRETATION 

real creator of the doctrine. In his celebrated 
second chapter, entitled " The Influence of 
Physical Laws," Buckle analyzed the effects of 
climate, food and soil upon social improvement 
and its basis, the accumulation of wealth. 
Buckle, it is true, as we have been lately re- 
minded, 1 does not claim that all history is to be 
interpreted in the light of external causes alone. 
He does, indeed, tell us that in early society 
the history of wealth depends entirely on soil 
and climate ; but he is careful to add that in a 
more advanced state of society there are other 
circumstances which possess an equal, and 
sometimes a superior, influence. 2 In fact, in a 
later chapter he maintains that " the advance 
of European civilization is characterized by a 
diminishing influence of physical laws and an 
increasing influence of mental laws " ; and he 
concludes that if, as he has shown, " the meas- 
ure of civilization is the triumph of the mind 
over external agents, it becomes clear that of 
the two classes of laws which regulate the pro- 
gress of mankind, the mental class is more 
important than the physical." 3 At the end of 

1 By Robertson, Buckle and his Critics (1895). 

2 History of Civilization, I, p. 44. 
»/&#., pp. 156, 157. 



EARLY PHILOSOPHY OF HISTORY 13 

his general analysis he even goes so far as to 
maintain that " we have found reason to believe 
that the growth of European civilization is solely 
due to the progress of knowledge, and that the 
progress of knowledge depends on the number 
of truths which the human intellect discovers, 
and on the extent to which they are diffused." * 
While it is clear, therefore, that Buckle was 
by no means so extreme as some of his critics 
would have us believe, it is none the less proba- 
ble that his name will remain associated with 
the doctrine of physical environment. For it 
was he, after all, who most forcibly and elo- 
quently called attention to the importance of the 
physical factors and to the influence that they 
have exerted in moulding national character 
and social life. Since his time much more has 
been done, not only in studying, as Buckle 
himself did, the immediate influence of climate 
and soil, 2 but also in explaining the allied field 
of the effect of the fauna and the flora on social 
development. The subject of the domestica- 
tion of animals, for instance, and its profound 

1 History of Civilization, I, p. 288. 

2 One of the best known, but most uncritical, representatives 
of this school is Grant Allen, especially in his article " Nation 
Making" in the Gentleman" 1 s Magazine, 1873, reprinted in the 
Popular Science Monthly of the same year. 



14 ECONOMIC INTERPRETATION 

effect on human progress has not only been 
investigated by a number of recent students, 1 
but has been made the very basis of the ex- 
planation of early American civilization by one 
of the most brilliant and most learned of recent 
historians. 3 A Russian scholar 8 has shown in 
detail the connection between the great rivers 
and the progress of humanity, and the whole 
modern study of economic geography is but an 
expansion on broader lines of the same idea. 

Buckle, however, devoted most of his atten- 
tion to the influence of physical forces on the 
production of the food supply. With the diffi- 
culties of the problem of distribution, which he 
confesses are of greater importance, he declares 
himself unable to grapple. An exception, in- 
deed, is to be made in the case of " a very early 
stage of society," where Buckle thinks he can 
prove that " the distribution of wealth is, like its 
creation, governed entirely by physical laws." 4 

1 Especially E. Hahn, Die Hausthiere und ihre Beziehung 
zur Wirtschaft des Menschen (1896). 

2 Payne, History of the New World called America ; especially 
vol. i, bk. ii. All this was, however, substantially pointed out 
by Morgan twenty years earlier in his Ancient Society, p. 24. 
For Morgan, see chapter vi, below. 

3 Metchnikoff, La Civilisation et les Grandes Fleuves Histo- 
riques. PreTace d'Elise'e Reclus. Paris, 1889. 

4 Civilization in England, I, p.52. 



EARLY PHILOSOPHY OF HISTORY 15 

His suggestive, but not very successful, attempt 
to prove this point, which rests upon an accept- 
ance of the one fundamental error of the classi- 
cal economists — the wages-fund doctrine — 
can here only be mentioned. 1 It is, however, 
important to emphasize the fact that, with this 
one exception, Buckle makes no endeavor to 
throw any light on the connection between 
physical environment and the distribution of 
wealth ; for distribution, he tells us, depends on 
" circumstances of great complexity, which it is 
not necessary here to examine," and of which, 
as he adds in a note, " many are still unknown." 2 

1 Briefly put, the argument is as follows : The two great con- 
stituents of food are carbon and oxygen ; the colder the country, 
the more highly carbonized must be the food ; nitrogenous foods 
are less costly than carbonaceous ones. Wages depend on popu- 
lation, population on the food supply ; hence the tendency for 
wages in hot countries is to be low, in cold countries to be high. 
Finally, wages and profits vary in inverse proportions ; or, as he 
puts it elsewhere, if rent and interest are high, wages are low. 
Hence the great differentiation of rural classes in hot countries. 

2 Civilization in England, I, p. 5 1 . It is amusing to note that the 
only law which Buckle himself accepts — " the great law of the ratio 
between the cost of labor and the profits of stock " — is precisely 
the one which, in its original form, has been discredited by modern 
economic research. Notwithstanding this fact, Mr. Robertson is 
so loyal to his hero that he calls it " one of those generalisations 
by which Buckle really illuminates history." — Robertson, Buckle 
and his Critics, p. 49. 



CHAPTER II 

PHILOSOPHICAL ANTECEDENTS OF THE THEORY' 

The explanation which Buckle made no 
attempt to give had been advanced more than 
a decade before by another writer who was des- 
tined to become far more famous and influen- 
tial. Karl Marx enjoyed some qualifications 
for the task which were denied to Buckle. 
Buckle was, indeed, well abreast of the foreign, 
as well as the English, literature on history and 
natural science; but his economic views were 
almost entirely in accord with those of the 
prevalent English school. These principles so 
completely lacked the evolutionary point of 
view as to preclude any historical treatment 
of society. Karl Marx, on the other hand, not 
only possessed the philosophical and scientific 
equipment of a German university graduate, but 
found himself in direct and unqualified opposi- 
tion to the teachings of the professional econo- 
mists. While Buckle contented himself with 
pointing out how physical forces affect the pro- 

16 



ANTECEDENTS OF THE THEORY 17 

duction of wealth, Marx addressed himself to 
the larger task of showing how the whole struc- 
ture of society is modified by the relations of 
social classes, and how these relations are 
themselves dependent on antecedent economic 
changes. In Buckle it was primarily the physi- 
cist that created a certain materialistic interpre- 
tation of history; in Marx it was the socialist 
that brought about a very different and specifi- 
cally economic interpretation of history. In 
order to understand the genesis of the economic 
interpretation of history it will be necessary to 
say a few words about the philosophical ante- 
cedents of Marx. 

Like most of the young Germans of the thir- 
ties, Marx was a firm believer in Hegel. The 
Hegelian philosophy, however, really contained 
two separate parts, — the dialectical method and 
the system. The fundamental conception of the 
Hegelian dialectic is that of process, or devel- 
opment by the union of opposites — a method 
that advances from notion to notion through 
negation. In all logic we begin with a half 
truth ; we proceed to its opposite, which is 
equally false ; and we then combine them into 
a third, which shows that they are equally true, 
when considered as necessary constituents of 



18 ECONOMIC INTERPRETATION 

the whole. 1 This idea of process, or develop- 
ment, Hegel applied to his celebrated state- 
ment : " All that is real is reasonable ; all that 
is reasonable is real." Interpreted in one way, 
this would mean fatalism, or optimistic conserv- 
atism. But according to Hegel everything that 
exists is by no means real. Only that is real 
which in the course of its development shows 
itself to be necessary. When it is no longer 
necessary, it loses its reality. As some of his 
followers pointed out, the French government 
had become so unnecessary by 1 789 that not it, 
but the Revolution, was real. Hence the origi- 
nal statement turns into the opposite : All that 
is real becomes in the course of time unreason- 
able, and is thus from the very outset unreal ; 
all that is reasonable in idea is destined to be 
realized, even though it may for the moment be 
utterly unreal. The original statements of the 
reasonableness of what is real, and of the reality 
of what is reasonable, blend into the higher 
statement that all that exists is destined some 
day to pass out of existence. 2 

1 Bonar, Philosophy and Political Economy, p. 300 ; and 
Schwegler, History of Philosophy, translated by Stirling (5th ed., 
1875), p. 324. 

2 F. Engels, Ludivig Feuerbach und der Ausgang der Klassi- 
schen Deutschen Philosophic, 1888 (2d ed., 1895), p. 3. 



ANTECEDENTS OF THE THEORY 19 

The importance of this dialectical method 
lay in the idea of process — in the realization 
of the fact that the conclusions of human 
thought and action are not final. Translated 
into social and political language, it formed 
the basis of the aspirations of the liberal and 
progressive elements in the community. On 
the other hand, Hegel himself never drew these 
radical conclusions from his theory because, 
although in his logic he made it clear that the 
truth is nothing but the dialectical process it- 
self, he nevertheless posited, as a result of his 
whole philosophy, the conception of the " abso- 
lute idea." Into the mysteries of this absolute 
idea we are not called upon to penetrate ; it is 
sufficient to point out that, as applied to the do- 
main of social politics, it results in a moderate 
conservatism. It is in the then existing Ger- 
man state that, according to Hegel, universal- 
ity and individuality, law and liberty — the 
highest stage of the universal spirit — find their 
reconciliation ! 

The antagonism between the dialectical and 
the absolute system of Hegel was not at first 
perceived. Just as both individualists and so- 
cialists to-day claim Adam Smith as the foun- 
tain head of their doctrines, so for a time both 



20 ECONOMIC INTERPRETATION 

radicals and conservatives in Germany harked 
back to Hegel. Toward the end of the thirties 
the schism became apparent. The Young- 
Hegelians swore by the dialectical method and 
landed in radicalism ; the orthodox followers re- 
mained true to the " absolute idea " and became 
reactionaries. At first, however, politics was 
a dangerous field to enter, and the discussion 
turned on religion. As either Catholicism or 
Evangelical Protestantism was the state reli- 
gion in each of the German states, the attack 
on religion was indirectly political in character, 
and was recognized as such. 

Strauss had set the ball rolling in 1835 by his 
Life of Jesus. His assertion of the mythical 
character of the evangelist accounts led to a 
famous dispute with Bruno Bauer, who went one 
step farther and maintained that they were not 
even myths, but pure fabrications. In this reac- 
tion against the foundations of the state religion 
the Young- Hegelians were practically forced 
back to the philosophical materialism of England 
and France in the eighteenth century. But they 
now recognized the antagonism between their 
new views and the doctrine of Hegel. While 
the philosophical materialists had posited nature 
as the only reality, Hegel regarded the absolute 



ANTECEDENTS OF THE THEORY 21 

idea — that is, the intellect and its logical pro- 
cess — as the fundamental conception, and na- 
ture as only the derivative or the reflex of the 
absolute idea. 

The uncertainty continued until the early 
forties, when Feuerbach published his Essence 
of Christianity? in which he sought to demol- 
ish the idealistic or transcendental basis of all 
theology. In this work Feuerbach claimed 
that nature exists independently of philosophy, 
that there is in reality nothing but nature and 
man, and that our religious conceptions are a 
product of ourselves, who again are nothing but 
a product of nature. Who has not heard of 
Feuerbach's famous phrase: Der Mensch ist 
was er isst — "Man is what he eats " ? Feuer- 
bach at once showed the Young- Hegelians 
that, important as the Hegelian dialectics may 
have been, the " absolute idea " was not the 
basis, but the product. 

Feuerbach exerted a profound influence on 
the thinkers of the day. Curiously enough, 
however, he also, in the domain of social poli- 
tics, gave rise to two antagonistic schools. 
Although in his philosophy a materialist, or 
rather a "naturalist," there was a decidedly 

1 Das Wesen des Christ enthtims. 



22 ECONOMIC INTERPRETATION 

idealistic strain in his etliical doctrine. With 
him religion is what the etymology of the word 
implies, — the really important thing that binds 
men together. Of his * attempt to erect an 
idealistic religion on a naturalistic basis, this 
is not the place to speak. 1 ' But it is important 
to point out that his doctrine of love as the 
basis of all religion led to the so-called " true " 
or " philosophical " socialism of the forties in 
Germany. The early socialists had accepted 
the views of the French reformers, St. Simon 
and Fourier. Now they asserted that all that 
was necessary was to apply Feuerbach's "hu- 
manism " to social relations, in order to pro- 
claim the speedy regeneration of mankind. 
The leaders of the " philosophical " socialists, 
Karl Griin and Moses Hess, 2 for a time domi- 
nated the social movement in Germany. 

While the superimposed idealism of Feuer- 
bach led to the "philosophical socialism" of the 
forties, his original and basic naturalism helped 
to produce in Karl Marx the founder of " scien- 
tific socialism." Marx was educated in Hegel- 

1 Cf. Lange, Geschichte des Materialismtis, vol. ii (3d ed., 
1877), pp. 73-8 r. 

2 For their views in detail, see George Adler, Die Geschichte 
der ersten Sozial-poliiischen Arbeiterbeivegtmg in Detitschland, 
pp. 83-85. 



ANTECEDENTS OF THE THEORY 23 

ianism, and to the end of his days loved to 
coquet with the Hegelian dialectic. He had 
become a Young- Hegelian and was deeply 
influenced by the appearance of Feuerbach's 
book. This set him thinking. The materi- 
alistic idea he accepted as beyond dispute, but 
he recognized some of its weaknesses. The 
materialism of the eighteenth century was es- 
sentially mechanical and unhistorical. It had 
developed before science had assumed its mod- 
ern garb. The watchword of modern science 
is that of evolution through natural selection. 
Although this had not yet been proclaimed 
even by the natural scientists, or at all events 
had certainly not been applied by any one to 
social conceptions, the idea was in the air ; and, 
although Marx was not at first specially well 
versed in natural science, the naturalism of 
Feuerbach, combined with the conception of 
process in the dialectic of Hegel, led him 
finally to the theory that all social institutions 
are the result of a growth, and that the causes 
of this growth are to be sought not in any 
idea, but in the conditions of material exist- 
ence. In other words, it led him to the eco- 
nomic interpretation of history. He then 
broke at once with the philosophical or sen- 



24 ECONOMIC INTERPRETATION 

timental socialists, and devoted all his time 
henceforth to the deeper study of economic 
conditions. 

That Marx's analysis of economic conditions 
led him to scientific socialism is a thing by 
itself, with which we have here no concern ; for 
that is an economic theory, based upon his 
doctrines of surplus value and profits, which 
have been engaging the attention of econo- 
mists throughout the world. We need to lay 
stress on Marx's philosophy, rather than on his 
economics ; and his philosophy, as we now 
know, resulted in his economic interpretation 
of history. It chanced that he also became a 
socialist ; but his socialism and his philosophy 
of history are, as we shall see later, really 
independent. One can be an " economic 
materialist " and yet remain an extreme indi- 
vidualist. The fact that Marx's economics 
may be defective has no bearing on the truth 
or falsity of his philosophy of history. 



CHAPTER III 

GENESIS AND DEVELOPMENT OF THE THEORY 

Let us now proceed to illustrate the develop- 
ment of the new doctrine from the writings of 
Marx himself. It will be advisable to quote 
freely, because these earlier works of Marx are 
little known even in Germany, and are almost 
unknown outside of Germany. 1 Yet they are 
of the utmost importance in showing the gen- 
esis of an idea which is now one of the storm 
centres not only of economic and social, but 
also of philosophical, discussion. 

In his earliest essays we see only the radical 
political reformer. As a young man of twenty- 
four, he was called in 1842 to the editorship of 
the Rheinische Zeitung, a daily paper started 

1 Just as these lines go to the printer, an announcement is 
made of the impending publication, in three volumes, of the more 
important of Marx's essays between 1841 and 1850, under the 
title : Aus dem Literarischen Nachlass von Karl Marx, Friedrich 
Engels und Ferdinand Lassalle. Herausgegeben von Franz 
Mehring. Gesammelte Schriften von Karl Marx tmd Friedrich 
Engels, 1841 bis 1850. Erster Band : Von Marz, 1841, bis Marz ; 
1844. Stuttgart, Dietz, 1 901-1902. 

25 



26 ECONOMIC INTERPRETATION 

in Cologne by some of the Young- Hegelians 
who belonged to the radical party. While bat- 
tling for political reforms Marx had his atten- 
tion called for the first time to economic 
questions. He severely criticised the historical 
school of jurisconsults, because they regarded 
all existing legal institutions as the necessary, 
and therefore the wise, result of a long evolu- 
tion. To their optimistic conservatism Marx 
opposed the Hegelian idea of liberty. 

It was not, however, until after the Rheinische 
Zeitung had been suspended by the government 
in 1843 that Marx went to Paris 1 and became a 
socialist — influenced largely by St. Simon and 
Proudhon, and possibly by the celebrated book 
of Lorenz Stein, which appeared tr^e year be- 
fore, on the socialistic and communistic move- 
ment in France. 2 At Paris, Marx started in 
1844, in conjunction with another leader of the 

1 In the mean time he published anonymously a violent 
article on the Prussian censorship, in the Anekdota zur Neuesten 
Deutschen Philosophie und Publicistik, von Bruno Bauer, Ludwig 
Feuerbach, Friedrich Koppen, Karl Nauwerk, Arnold Ruge und 
einigen Ungenannten, 1843. One of these " Ungenannten " was 
Karl Marx, who wrote under the title of a " Rhinelander." The 
article may be found in vol. i, pp. 56-88. 

2 It is more than probable, however, that Marx was converted 
to socialism wholly by the French writers, who themselves 
exerted so great an influence on Stein. Cf. the correspondence 
of Arnold Ruge, vol. i. 



DEVELOPMENT OF THE THEORY 27 

Young- Hegelians, Arnold Ruge, the Deutsche 
Franz'osische Jahrbiicher. Here the beginning 
of the opposition to the French communists is 
perceptible; for in the introductory editorial 
we are told that what has saved Germany from 
" the metaphysical and fantastical ideas of 
Lamennais, Proudhon, St. Simon and Fourier " 
is the Hegelian logic. 1 Yet Marx showed the 
influence of Feuerbach by writing an article 
in criticism of Hegel's Philosophy of Law, in 
which he sought to prove how theological criti- 
cism was now necessarily being replaced by 
political criticism. 

Marx, indeed, went a step farther, and empha- 
sized the necessity of a revolution of the fourth 
estate, — the proletariat. He was beginning to 
formulate his ideas on economic questions. 
" The relation of industry and of the world 
of wealth in general to the political world is 
the chief problem of modern times." 2 In 
another place he tells us that "revolutions 



1 Deiitsch-Franz'dsischejahrb'ucher . Herausgegeben von Arnold 
Ruge und Karl Marx. Erste und Zweite Lieferung, 1844, p. 8. 
Cf. also : " Uns Deutsche hat . . . von der Willkiir und Phan- 
tastik das Hegelsche System befreit." 

2 "Das Verhaltniss der Industrie, iiberhaupt der Welt des 
Reichthums zu der politischen Welt ist ein Hauptproblem der 
modernen Zeit." — Ibid., p. 75. 



28 ECONOMIC INTERPRETATION 

need a passive element, a material basis." 1 
In a later essay in the same periodical on 
the " Jewish Question," in which he opposed 
the views of Bruno Bauer, Marx claims that 
" we must emancipate ourselves before we can 
emancipate others." 2 He seeks to show that 
the importance of the French Revolution con- 
sisted in freeing not only the political forces of 
society, but also the economic basis on which 
the political superstructure rested. 3 The politi- 
cal change was in a certain sense idealism ; but 
it marked at the same time the materialism of 
society. 4 

The double number of the Deutsch-Fran- 
zosische Jahrbucher was the only one that ap- 
peared. Ruge and Marx could not agree in 
their attitude toward the question of commu- 
nism. While in Paris, however, Marx formed 

1 " Die Revolutionen bediirfen namlich eines passiven Ele- 
mentes, einer materiellen Grundlage. . . . Die Theorie wird in 
einem Volke immer nur so weit verwircklicht als sie die Ver- 
wircklichung seiner Bedurfnisse ist." — Deittsch-Franzosische 
Jahrbucher, p. 80. 2 Ibid., p. 184. 

3 " Die politische Emancipation ist zugleich die Auflosung der 
alten Gesellschaft, auf welcher das dem Volk entfremdete Staats- 
wesen, die Herrschermacht, ruht. Die politische Revolution ist 
die Revolution der burgerlichen Gesellschaft." — Ibid., p. 204. 

4 " Allein die Vollendung des Idealismus des Staats war zu- 
gleich die Vollendung des Materialismus der burgerlichen Gesell- 
schaft. 1 ' — Ibid., p. 205. 



DEVELOPMENT OF THE THEORY 29 

an intimacy with his lifelong friend, Frederick 
Engels, whose acquaintance he had originally 
made while both were working on the editorial 
staff of the Rheinische Zeitung} They now 
decided to write in common a work against 
Bruno Bauer, who represented the more specu- 
lative wing of the Young- Hegelians. This 
appeared in 1845 under the title of The Holy 
Family} 

In this book, written almost entirely by 
Marx, he shows the strong influence of Feuer- 
bach. 3 As he was at that time, however, 
more interested in opposing the transcendental 
notions of the other Young-Hegelians in gen- 
eral than in emphasizing the differences be- 
tween himself and the " sentimental " socialists, 
it will not surprise us to find him defending 
Proudhon. 4 Yet even here Marx shows the 

1 Some correspondence of this early period is preserved in 
" Aus den Briefen von Engels an Marx " in Die JVeue Zeit } XIX 
(1901), ii, pp. 505 et seq. 

2 Die Heilige Familie oder Kritik der Kritischen Kritik. Gegen 
Bruno Bauer und Consorten. Von Friedrich Engels und Karl 
Marx. Frankfurt a. M., 1845. 

3 Cf. the enthusiastic description of Feuerbach on p. 139 and 
the disdainful attitude toward Hegel on p. 126. 

4 " Proudhon's Schrift ' Ou'est-ce que la Propriete ' hat dieselbe 
Bedeutung fur die moderne Nationalbkonomie, welche Say's 
[evidently a misprint for Sieyes'] Schrift ' Qu'est-ce que le tiers 
Etat' fur die moderne Politik hat." — Ibid., p. 36. 



30 ECONOMIC INTERPRETATION 

essentially mechanical nature of the older 
French materialism, and points out how the 
philosophic materialism of Helvetius and Hol- 
bach led to the socialism of Babceuf and Fou- 
rier. 1 Incidentally, Marx calls attention to the 
economic basis of the French Revolution, and 
points out that the individual of the French 
Revolution differed from the individual of clas- 
sic antiquity because his economic and indus- 
trial relations were different. 2 Finally, in 
another passage he asks outright : — 

" Do these gentlemen think that they can 
understand the first word of history as long 
as they exclude the relations of man to nature, 
natural science ana! industry? Do they believe 
that they can actually comprehend any epoch 
without grasping the industry of the period, 
the immediate methods of production in actual 

1 " Fourier geht unmittelbar von der Lehre der franzbsischen 
Materialisten aus. Die Babouvisten waren rohe uncivilisirte 
Materialisten, aber auch der entwickelte Communismus datirt 
direkt von dem franzbsischen Materialismus." — Op. cit., p. 207, 
and the quotations on pp. 209-211. As the volume is extremely 
scarce, it may be noted that a part of this chapter was reprinted 
in Die Neue Zeit, III (1885), pp. 385-395. 

2 In speaking of a placard containing the Declaration of 
Rights, Marx says : " Eben diese Tabelle proklamirte das Recht 
eines Menschen, der nicht der Mensch des antiken Gemeinwesens 
sein kann, so wenig als seine nationalbkonomischen und in- 
dustriellen Verhaltnisse die antiken sind." — Ibid., p. 192. 



DEVELOPMENT OF THE THEORY 31 

life ? . . . Just as they separate the soul from 
the body, and themselves from the world, so 
they separate history from natural science and 
industry, so they find the birthplace of history 
not in the gross material production on earth, 
but in the misty cloud formation of heaven." 1 

Although we find in Marx's early works only 
these incidental allusions to the doctrine of 
economic interpretation, we are told by Engels, 
the literary executor of Marx, that Marx had 
worked out his theory by 1845. 2 That Engels 

1 " Oder glaubt die kritische Kritik in der Erkenntniss der 
geschichtlichen Wirklichkeit auch nur zum Anfang gekommen zu 
sein, so lange sie das theoretische und praktische Verhaltniss des 
Menschen zur Natur, die Naturwissenschaft und die Industrie, 
aus der geschichtlichen Bewegung ausschliesst ? Oder meint sie 
irgend eine Periode in der That schon erkannt zu haben, ohne z. 
B. die Industrie dieser Periode, die unmittelbare Produktions- 
weise des Lebens selbst, erkannt zu haben? . . . Wie sie das 
Denken von dem Sinnen, die Seele vom Leibe, sich selbst von 
der Welt trennt, so trennt sie die Geschichte von der Natur- 
wissenschaft und Industrie, so sieht sie nicht in der grob- 
materiellen Produktion auf der Erde, sondern in der dunstigen 
Wolkenbildung am Himmel die Geburtstatte der Geschichte." — 
Die Heilige Familie, p. 238. 

2 " The ' manifesto ' being our joint production, I consider 
myself bound to state that the fundamental proposition which 
forms its nucleus belongs to Marx. That proposition is : that in 
every historical epoch the prevailing mode of economic produc- 
tion and exchange, and the social organization necessarily follow- 
ing from it, form the basis upon which it is built up, and from 
which alone can be explained the political and intellectual his- 
tory of that epoch ; that, consequently, etc. etc. . . . 

" This proposition, which in my opinion is destined to do for 



32 ECONOMIC INTERPRETATION 

is quite correct in this is shown not only by 
the quotations just mentioned, but also by the 
annotations which Marx made to Feuerbach in 
1845. 1 Marx here objects to the old mechanical 
materialistic doctrine that men are simply the 
results of their environment, because it forgets 
that this environment can itself be changed by 
man. 2 He also takes exception to Feuerbach's 
whole view of religion, on the ground that 
Feuerbach fails to perceive that man is the 
product of his social relations and that religion 
itself is a social outgrowth. 3 A fuller statement 

history what Darwin's theory has done for biology, we both had 
been rapidly approaching for some years before 1845. . . . But 
when I again met Marx ... in spring, 1845, ne had it already 
worked out, and put it before me in terms almost as clear as those 
in which I have stated it here." — Manifesto of the Communist 
Party, by Marx and Engels. Authorized English translation, 
edited and annotated by Frederick Engels, 1888, preface, pp. 5, 6. 
This preface was written in English by Engels, and appeared in 
German only in subsequent editions. 

1 Published as an appendix to Ludwig Feuerbach tmd der 
Ausgang der Klassischen Deutschen Philosophic. Von Friedrich 
Engels. Mit Anhang, Karl Marx iiber Feuerbach, vom Jahre 
1845 (1888). 

2 " Die materialistische Lehre, dass die Menschen Produkte 
der Umstande und der Erziehung sind, vergisst, dass die Um- 
stande eben von den Menschen verandert werden und dass der 
Erzieher selbst erzogen werden muss." — Op. cit., p. 80. 

3 " Feuerbach lost das religiose Wesen in das menschliche 
Wesen auf. Aber das menschliche Wesen ist kein . . . Abstrak- 
tum. In seiner Wirklichkeit, ist es das Ensemble der gesell- 
schaftlichen Verhaltnisse. . . . Feuerbach sieht nicht, dass das 



DEVELOPMENT OF THE THEORY 33 

of his new 1 position, however, is found in some 
recently discovered essays which were written 
at about that time. 2 These articles, published 
anonymously in the Westf'dlischer Damp/boot? 
are of cardinal importance because Marx now 
for the first time emphasized his disagreement 
with the "sentimental socialists." 

In the first series of articles, Marx criticises 
a German communistic sheet published in New 
York, which was devoting much attention to the 
Anti-Rent Riots. 4 Marx discusses the agrarian 
movement in the United States and tries to show 
from his new point of view the connection be- 

' religiose Gemiith' selbst ein gesellschaftliches Produkt ist." — 
Ludwig Fetter bach, p. 81. 

1 Peter von Struve claims that this new position was not 
occupied by Marx until 1846. Cf. his articles, "Zur Entwick- 
lungsgeschichte des wissenschaftlichen Sozialismus," in Die Neue 
Zeit, XV (1897), i, p. 68, and ii, pp. 228, 269. Struve, however, 
seems to lay too little stress on the points emphasized above. Cf. 
also the article of Kampffmeyer, " Die okonomischen Grundlagen 
des deutschen Sozialismus," in Die Neue Zeit, V (1887), especially 
p. 536, where attention is called to Marx's historical interpretation 
of history in his letters to Ruge in 1843. 

2 The substance of these essays has been printed by Struve in 
Die Neue Zeit, XIV (1896), 41-48, under the title of " Zwei bisher 
unbekannte Aufsatze von Karl Marx aus den vierziger Jahren. 
Ein Beitrag zur Entstehungsgeschichte des wissenschaftlichen 
Sozialismus." 

3 A monthly review edited by Otto Liining, which lived from 
1845 to l8 4 8 - 

4 Der Volkstribun, edited by H. Kriege in 1846. 



34 ECONOMIC INTERPRETATION 

tween economic and political phenomena. In a 
second series of articles 1 he joins issue with Grim 
and Hess, the chief advocates of philosophical 
socialism, and ridicules their failure to perceive 
that an alteration in methods of production 
brings about changes in the whole social life. 2 

By 1847 3 Marx had made a somewhat deeper 
study of economic history. He was now so 
convinced of the truth of his new theory that 
he proceeded to make a furious onslaught on 

1 " Karl Griin, die soziale Bewegung in Frankreich und Belgien 
oder die Geschichtsschreibung des wahren Sozialismus." This 
appeared early in 1847. The whole of this essay has now been 
printed, with an introduction by E. Bernstein, in Die Neue Zeit, 
XVIII (1900), pp. 4, 37, 132, 164. 

2 " Herr Grim vergisst, dass Brot heutzutage durch Dampf- 
miihlen, friiher durch Wind und Wassermiihlen, noch friiher 
durch Handmiihlen produzirt wurde, dass diese verschiedenen 
Produktionsweisen vom blossen Brotessen ganzlich unabhangig 
sind. . . . Dass mit diesen verschiedenen Stufen der Produk- 
tion auch verschiedene Verhaltnisse der Produktion zur Consum- 
tion, verschiedene Widerspriiche beider gegeben sind, dass diese 
Widerspriiche zu verstehen sind nur aus einer Betrachtung, zu 
losen nur durch eine praktische Veranderung, der jedesmeligen 
Produktionsweise und des gan; en darauf basirenden gesellschaft- 
lichen Zustandes : das ahnt Herr Griin nicht." {Die Neue Zeit, 
XIV, ii, p. 51.) That the difference between Marx and the " true 
socialists " has often been exaggerated is claimed by Mehring in 
Die Neue Zeit, XIV, ii, p. 401. 

3 In this year Marx also published an article in the Deutsche 
Briisseler Zeitung entitled " Die moralisierende Kritik und die 
kritisierende Moral, ein Beitrag zur deutschen Kulturgeschichte." 
It was directed against Karl Heinzen and was of very much the 
same character as his attack on Griin. 



DEVELOPMENT OF THE THEORY 35 

the older socialists in the person of their chief 
representative — Proudhon. In reply to Prou- 
dhon's Philosophy of Misery Marx wrote his 
Misery of Philosophy. Here he elaborates the 
theory that economic institutions are historical 
categories and that history itself must be inter- 
preted in the light of economic development. 
We read — in French, it is true, for Marx wrote 
equally well in German, English and French — 
that the conception of private property changes 
in each historical epoch, in a series of entirely 
different social relations. 1 In a more general 
way Marx contends that all social relations are 
intimately connected with the productive forces 
of society. He tells us that 

" in changing the modes of production, mankind 
changes all its social relations. The hand mill 
creates a society with the feudal lord ; the steam 
mill a society with the industrial capitalist. The 

1 " A chaque epoque historique, la proprie*te s'est developpee 
diffdremment et dans une serie de rapports sociaux entierement 
differents. Ainsi definir la propriete bourgeoise n'est autre chose 
que faire 1'expose de tous les rapports sociaux de la production 
bourgeoise. Vouloir donner une definition de la propriete" 
comme d'un rapport independant, d'une categorie a part, d'une 
idee abstraite et dternelle, cela ne peut etre qu'une illusion de 
me'taphysique ou de jurisprudence. 1 ' — Misere de la Philosophic 
Riponse a la Philosophie de la Miser e de M. Proudhon. Par 
Karl Marx, 1847, p. 153. 



36 ECONOMIC INTERPRETATION 

same men who establish social relations in con- 
formity with their material production also 
create principles, ideas and categories in con- 
formity with their social relations. . . . All 
such ideas and categories are therefore histori- 
cal and transitory products." 1 

In another place he maintains that " the rela- 
tions in which the productive forces of society 
manifest themselves, far from being eternal 
laws, correspond to definite changes in man 
and in his productive forces." 2 Marx applies 
this general law in many ways. Thus, in an 

1 " Les rapports sociaux sont intimement lids aux forces pro- 
ductives. En acquirant de nouvelles forces productives les 
hommes changent leur mode de production, et en changeant leur 
mode de production, la maniere de gagner leur vie, ils changent 
tous leurs rapports sociaux. Le moulin a bras vous donnera la 
societe" avec le suzerain ; le moulin a vapeur, la society avec le 
capitaliste industriel. . . . Les memes hommes qui dtablissent 
les rapports sociaux conformement a leur productivity materielle 
produisent aussi les principes, les idees, les categories, conforme- 
ment a leurs rapports sociaux. . . . Ainsi ces idees, ces catego- 
ries, sont aussi peu e'ternelles que les relations qu'elles expriment. 
Elles sont des produits historiques et transitoires." — Misere de 
la Philosophie, pp. 99, 100. 

2 " N'est-ce pas dire assez que le mode de production, les rap- 
ports dans lesquels les forces productives se developpent, ne sont 
rien moins que des lois e'ternelles, mais qu'ils correspondent a un 
developpement determine des hommes et de leurs forces produc- 
tives, et qu'un changement survenu dans les forces productives des 
hommes amene necessairement un changement dans les rapports 
de production." — Ibid., p. 115 ; cf. pp. 152, 177. 



DEVELOPMENT OF THE THEORY 37 

acute study of the doctrine of rent, he points 
out that rent in the Ricardian sense is nothing 
but "patriarchal agriculture transformed into 
commercial industry"; 1 and, after explaining 
the historical growth of modern agricultural 
conditions, he concludes by objecting to the 
whole classical school, because it fails to see 
that economic institutions can be understood 
only as historical categories. 2 In another pas- 
sage he contends that money itself is not a 
thing, but a social relation, and that this rela- 
tion corresponds to a definite form of produc- 
tion in precisely the same way as exchanges 
between individuals. 3 Finally, in analyzing the 
essence of machinery and the historical impor- 
tance of the principle of division of labor, Marx 

1 " La rente, dans le sens de Ricardo, c'est l'agriculture patri- 
arcale transformee en Industrie commerciale, le capital industriel 
applique a la terre, la bourgeoisie des villes transplanted dans les 
campagnes." — Misere de la Philosophie, p. 159. 

2 " Ricardo aprds avoir suppose" la production bourgeoise 
comme necessaire pour determiner la rente, l'applique ne"anmoins 
a la propriete fonciere de toutes les epoques et de tous les pays. 
Ce sont Ik les errements de tous les e"conomistes qui representent 
les rapports de la production bourgeoise comme des categories 
dternelles ." — Ibid. , p . 1 60 . 

3 " La monnaie, ce n'est pas une chose, c'est un rapport social. 
... Ce rapport est un anneau et comme tel, intimement lid a 
tout l'enchainement des autres rapports economiques ; . . . ce 
rapport correspond a un mode de production determine", ni plus 
ni moins que l'echange individual." — Ibid., p. 64. 



38 ECONOMIC INTERPRETATION 

tells us that " machinery is not any more of an 
economic category than is the ox that pulls the 
plough ; it is a productive force. The modern 
factory, which is itself based on machinery, is a 
social relation, an economic category." 1 In short, 
social life at any one time is the result of an 
economic evolution. 

In the famous Manifesto of the Commtcnist 
Party? which appeared the following year, we 
find the implications, rather than the direct 
statement, of the principle. After describing 
how the guild system of industry gave way to 
the modern industrial system, based on the 
world market and on the revolution in indus- 
trial production, Marx points out that the bour- 
geoisie, in revolutionizing the methods of pro- 
duction, alters with them the whole character 
of society, and displaces feudalism with modern 
conditions. At the present day this is a truism ; 
but at the time the manifesto appeared it was a 
novel and striking conception. Unfortunately, 
the thought was so inextricably interwoven with 

1 " Les machines ne sont plus une categorie e'conomique que 
ne saurait etre le boeuf que traine la charrue. Les machines ne 
sont qu'une force productive. L'atelier moderne, qui repose sur 
Tapplication des machines, est un rapport social de production, 
une categorie economique." — Misere de la Philosophie, p. 128. 

2 Manifest der Kommunistischen Partei (London, il 
pp. 4-7. 



DEVELOPMENT OF THE THEORY 39 

Marx's peculiarly socialistic explanation of the 
effects of machinery, of the function of capital 
and of the speedy cataclysm of society, that it 
created at the time but little impression. 

In the succeeding years Marx made various 
applications of his theory. In 1849 he pub- 
lished a series of articles on Wage-Labor and 
Capital, in the course of which he traced the 
reason for the change from slavery to serfdom 
and to the wages system, and again laid down 
the principle that all relations of society depend 
upon changes in the economic life and more 
particularly in the modes of production. He 
tells us that 

"with the change in the social relations by 
means of which individuals produce, that is, 
in the social relations of production, and with 
the alteration and development of the material 
means of production, the powers of production 
are also transformed. The relations of pro- 
duction collectively form those social relations 
which we call society, and a society with defi- 
nite degrees of historical development. . . . 
Ancient society, feudal society, bourgeois so- 
ciety, are simply instances of this collective 
result of the complexes of relations of produc- 



40 ECONOMIC INTERPRETATION 

tion, each of which marks an important step in 
the historical development of mankind." 1 

In a series of articles published in 1850, on 
" The Class Struggles in France from 1848 to 
1850," Marx made the first attempt to apply his 
principle to an existing political situation. 2 He 
endeavored to show that the great crisis of 1847 
was the real cause of the February revolution, 
and that the economic reaction of 1849 and 
1850 was the basis of the political reaction 
throughout the Continent. He followed this 
in 1852 by another article on "The Eighteenth 
Brumaire," in which he attempted to lay bare 
the economic foundations of the coup d'Etat 
in France, and to show that the empire really 
depended on the small farmer or peasant, who 
had now become a conservative in place of a 
revolutionist. 3 It is in this work that we find 

1 " Lohnarbeit und Kapital," Neue Rheinische Zeitung, Politisch- 
okonomische Revue, redigirt von Karl Marx, April, 1849. This 
was a series of lectures which Marx delivered in 1847 to a Brussels 
labor union. They have recently been translated by J. L. Joynes 
and published in pamphlet form under the title, Wage-Labor and 
Capital (London, 1897). 

2 These articles appeared under the simple title "1848-1849" 
in the Neue Rheinische Zeitung, 1850. They were not published 
in pamphlet form until 1895, when Engels edited them under 
the title Die Klassenk'dmpfe in Frankreich, 184.8 bis 1850. 

3 " Der Achtzehnte Brumaire des Louis Bonaparte " constituted 
the second number of a political monthly called Die Revolution, 



DEVELOPMENT OF THE THEORY 41 

the interesting bit of social psychology in which 
the ideals of life themselves, as well as the 
views of any one individual, no matter how 
eminent, are traced to social and economic 
causes. Marx informs us that 

" on the various forms of property, on the con- 
ditions of social existence, there rises an entire 
superstructure of various and peculiarly formed 
sensations, illusions, methods of thought and 
views of life. The whole class fashions and 
moulds them from out of their material founda- 
tions and their corresponding social relations. 
The single individual, in whom they converge 
through tradition and education, is apt to 
imagine that they constitute the real determin- 
ing causes and the point of departure of his 
action." 1 

edited in New York in 1852 by Joseph Weydemeyer. It was 
reprinted as a separate pamphlet by Marx in 1869. A third 
edition was published in cheap form in 1885. 

1 " Auf den verschiedenen Formen des Eigenthums, auf den 
sozialen Existenzbedingungen, erhebt sich ein ganzer Ueberbau 
verschiedener und eigenthiimlich gestalteter Empfindungen, 
Illusionen, Denkweisen und Lebensanschauungen. Die ganze 
Klasse schafft und gestaltet sie aus ihren materiellen Grundlagen 
heraus und aus den entsprechenden gesellschaftlichen Verhalt- 
nissen. Das einzelne Individuum, dem sie durch Tradition und 
Erziehung zufiiessen, kann sich einbilden, dass sie die eigentlichen 
Bestimmungsgriinde und den Ausgangspunkt seines Handelns 
bilden." — Op. tit., 2d ed., p. 26. 



42 ECONOMIC INTERPRETATION 

In another passage he contends that "men 
make their own history, but they make it not 
of their own accord or under self-chosen con- 
ditions, but under given and transmitted con- 
ditions. The tradition of all dead generations 
weighs like a mountain on the brain of the 
living." 1 

During the early fifties, largely through the 
efforts of Mr. Charles A. Dana, Marx was en- 
gaged to write a series of articles for the New 
York Tribune, which, under the editorship of 
Horace Greeley, was devoting considerable at- 
tention to the Fourierist socialistic movement 
in the United States. In these articles, 2 which 
appeared in English for a period of over eight 
years, some of them anonymously, as editorials 
of the Tribune, Marx discussed the general 

1 " Die Menschen machen ihr eigene Geschichte, aber sie 
machen sie nicht aus freien Stiicken, nicht unter selbstgewahlten, 
sondern unter gegebenen und uberlieferten Umstanden. Die 
Tradition aller toten Geschlechter lastet wie ein Alp auf dem 
Gehirn der Lebenden." — Op. cit., 2d ed., p. 26. 

2 These articles have recently been collected and published in 
book form. The articles of 1851-52 have appeared under the 
title, Revolution and Counter Revohition, or Germany in 1848. 
By Karl Marx. Edited by Eleanor Marx Aveling, London, 1896. 
The letters of 1853-56 are entitled: The Eastern Question, a 
Reprint of Letters written 1853-1836, dealing with the Events 
of the Crimean War. By Karl Marx. Edited by Eleanor Marx 
Aveling and Edward Aveling, London, 1897. 



DEVELOPMENT OF THE THEORY 43 

politics of continental Europe in the light of 
his economic theory, and contributed in no 
mean degree to the enlightenment of the 
American public. It was not, however, until 
the appearance in 1859 of his first professedly 
scientific work, Contributions to the Criticism 
of Political Economy, that Marx endeavored to 
sum up his doctrine of economic interpretation 
and to show how this induced him to attempt 
his analysis of modern industrial society. He 
tells us that his 

" investigation led to the conclusion that legal 
relations, like the form of government, can be 
understood neither of and in themselves nor 
as the result of the so-called general progress 
of the human mind, but that they are rooted 
in the material conditions of life. ... In the 
social production of their every-day existence 
men enter into definite relations that are at 
once necessary and independent of their own 
volition — relations of production that corre- 
spond to a definite stage of their material 
powers of production. The totality of these 
relations of production constitutes the economic 
structure of society — the real basis on which 
is erected the legal and political edifice and to 
which there correspond definite forms of social 



44 ECONOMIC INTERPRETATION 

consciousness. The method of production in 
material existence conditions social, political 
and mental evolution in general." 1 

And, after speaking of the periods when the 
old forces are in temporary conflict with the new, 
Marx proceeds : — 

" With the alteration in the economic basis 
the whole immense superstructure is more 
or less slowly transformed. In considering 
such transformations we must always distin- 
guish between the material transformation in 
the economic conditions of production, of which 
natural science teaches us, and the legal politi- 
cal, aesthetic or philosophical — in short ideo- 

1 " Meine Untersuchung mlindete in dem Ergebniss, dass 
Rechtsverhaltnisse wie Staatsformen, weder aus sich selbst zu 
begreifen sind, noch aus der sogenannten allgemeinen Entwicklung 
des menschlichen Geistes, sondern vielmehr in den materiellen 
Lebensverhaltnissen wurzeln. ... In der gesellschaftlichen 
Produktion ihres Lebens gehen die Menschen bestimmte, noth- 
wendige, von ihrem Willen unabhangige Verhaltnisse ein, Pro- 
duktionsverhaltnisse, die einer bestimmten Entwicklungsstufe 
ihrer materiellen Produktionskrafte entsprechen. Die Gesamm- 
theit dieser Produktionsverhaltnisse bildet die okonomische 
Struktur der Gesellschaft, die reale Basis, worauf sich ein juris- 
tischer und politischer Ueberbau erhebt, und welcher bestimmte 
gesellschaftliche Bewusstseinsformen entsprechen. Die Produk- 
tionsweise des materiellen Lebens bedingt den socialen, politischen 
und geistigen Lebensprocess iiberhaupt." — Ztir Kritik der 
Politischen Oekonomie, Erstes Heft (1859), pp. iv, v. 



DEVELOPMENT OF THE THEORY 45 

logical forms, in which men become conscious 
of this conflict and fight it out." 1 

In his great work on Capital, published eight 
years later, although he continually takes it for 
granted, Marx nowhere formulates this law. 
While the final chapter contains some interest- 
ing economic history of England since the six- 
teenth century, Marx confines the discussion 
to a study of the economic results rather than 
of the wider social or political consequences. 
Partly for this reason, and partly because the 
general public did not distinguish between his 
historical views and his socialistic analysis of 
existing industrial society, Marx's view of his- 
tory had at first but slight influence outside of 
socialistic circles. After his earlier works came 
to be studied more carefully, the younger Marx- 
ists pointed out the real import of the historical 
principle. But it was not until the publication 
in 1894, eleven years after the death of Marx, 
of the third volume of Capital, with its wealth 

1 " In der Betrachtung solcher Umwalzungen muss man stets 
unterscheiden zwischen der materiellen naturwissenschaftlich treu 
zu konstatirenden Umwalzung in den okonomischen Produktions- 
bedingungen und denjuristischen, politischen, religibsen, kiinstle- 
rischen oder philosophischen, kurz ideologischen Formen, worin 
sich die Menschen dieses Konflikts bewusst werden und ihn 
ausfechten." — Zur Kritik der Politischen Oekonomie, Erstes 
Heft (1859), p. v. 



46 ECONOMIC INTERPRETATION 

of historical interpretation, that the continental 
writers in general realized the significance of the 
theory ; and it is only since that time that the 
heated controversy has spread throughout 
the scientific world. 1 Since neither the earlier 
works of 1847 or 1859 nor any of the later vol- 
umes of Capital have as yet been translated, 
the English-speaking public has had only slight 
opportunity of grasping the real significance of 
Marx's theory or its corollaries. 

In the first volume of Capital the. only passage 
in which Marx definitely refers to his funda- 
mental theory is tucked away in a note. 2 Here 
he compares his theory to that of Darwin, and 
insists that it is based on the only really mate- 
rialistic method : — 

" A critical history of technology would show 
how little any of the inventions of the eigh- 
teenth century are the work of a single indi- 
vidual. Hitherto there has been no such book. 
Darwin has interested us in the history of 
Nature's technology, i.e., in the formation of 
the organs of plants and animals, which organs 
serve as instruments of production for sustain- 

1 In the socialistic circles the controversy may be said to date 
from 1890, when the matter was taken up in the discussions of 
the programme of the Social Democratic party in Germany. 

2 Capital (English translation), II, p. 367, note I. 



DEVELOPMENT OF THE THEORY 47 

ing life. Does not the history of the productive 
organs of man, of organs that are the material 
basis of all social organization, deserve equal 
attention ? And would not such a history be 
easier to compile, since, as Vico says, human 
history differs from natural history in this, that 
we have made the former, but not the latter? 
Technology discloses man's mode of dealing 
with Nature, — the process of production by 
which he sustains his life, and thereby also lays 
bare the mode of formation of his social rela- 
tions, and of the mental conceptions that flow 
from them. Every history of religion, even, 
that fails to take account of this material basis, 
is uncritical. It is, in reality, much easier to 
discover by analysis the earthly core of the 
misty creations of religion, than it is, con- 
versely, to develop from the actual relations 
of life the corresponding celestialized forms of 
those relations. The latter is the only material- 
istic, and therefore the only scientific method. 
The weak points in the abstract materialism 
of natural science, a materialism that excludes 
history and its process, are at once evident 
from the abstract and ideological conceptions 
of its spokesmen, whenever they venture beyond 
the bounds of their own specialty." 



48 ECONOMIC INTERPRETATION 

It is in the third volume of Capital that 
Marx gives a definite statement of his theory, 
with some necessary qualifications, inattention 
to which is partly responsible for some of the 
objections to the theory. With this extract we 
may fitly close the series of quotations : 1 

" It is always the immediate relation of the 
owner of the conditions of production to the 
immediate producers — a relation each of whose 
forms always naturally corresponds to a given 
stage in the methods and conditions of labor, 
and thus in its social productivity — in which 
we find the innermost secret, the hidden basis 
of the entire social structure, and thus also of 
the political forms. . . . This does not prevent 

1 " Es ist jedesmal das unmittelbare Verhaltniss der Eigen- 
thiimer der Produktionsbedingungen zu den unmittelbaren Pro- 
ducenten — ein Verhaltniss, dessen jedesmalige Form stets 
naturgemass einer bestimmten Entwicklungsstufe der Art und 
Weise der Arbeit, und daher ihrer gesellschaftlichen Produktiv- 
kraft entspricht — worin wir das innerste Geheimniss, die verbor- 
gene Grundlage der ganzen gesellschaftlichen Construction, und 
daher auch die politische Form der Souveranetats- und Abhan- 
gigkeitsverhaltnisse, kurz, der jedesmaligen specifischen Staatsform 
finden. Dies hindert nicht, dass dieselbe bkonomische Basis — 
dieselbeden Hauptbedingungennach — durch zahllos verschiedene 
empirische Umstande, Naturbedingungen, Racenverhaltnisse, von 
aussen wirkende geschichtlichen Einfiusse u. s. w. unendliche 
Variationen und Abstufungen in der Erscheinung zeigen kann, 
die nur durch Analyse dieser empirisch gegebenen Umstande zu 
begreifen sind." — Das Kapital, III, 2, pp. 324, 325. 



DEVELOPMENT OF THE THEORY 49 

this same economic basis in all its essentials 
from showing in actual life endless variations 
and gradations due to various empirical facts, 
natural conditions, racial relations, and external 
historical influences without number — all of 
which can be comprehended only by an analysis 
of these conditions as they are disclosed by 
experience." 



CHAPTER IV 

THE ORIGINALITY OF THE THEORY 

We have now studied the genesis and devel- 
opment of the doctrine, chiefly in the words of 
Marx himself. But, it will be asked, how far 
is the theory of economic interpretation original 
with Marx? 

There are, indeed, abundant traces of the con- 
nection between economic causes and legal, 
political or social conditions to be found in the 
literature of earlier centuries. Harrington, for 
instance, in his Oceana, tells us that the form 
of government depends upon the tenure and dis- 
tribution of land. The very foundation of his 
whole theory is : " Such as is the proportion or 
ballance of dominion or property in Land, such 
is the nature of the Empire." 1 In the eighteenth 

1 " If one man," he proceeds, " be sole Landlord, or over- 
balance the people, he is Grand Signior . . . and his Empire is 
Absolute Monarchy. If the Few or a Nobility overballance the 
people, it makes the Gothic ballance and the Empire is mixed 
Monarchy (as in Spain and Poland). If the whole people be 
Landlords, or hold the lands so divided among them that no one 

5° 



ORIGINALITY OF THE THEORY 51 

century we find writers, like Germain Gamier 1 
in France, Dalrymple 2 in England and Moser 3 
in Germany, who emphasized the influence of 
property in land on politics. Especially in the 
socialists of the second quarter of the nineteenth 
century we find not infrequent allusions to a 
similar point of view. Fourier, St. Simon, 
Proudhon and Blanc naturally call attention to 
the influence of economic conditions on the 
immediate politics of the day, 4 and the first 
foreign historian of French socialism, Lorenz 
von Stein, elaborated some of their ideas by 
positing the general principle of the subordina- 

man or number of men . . . overbalance them, the Empire 
(without the interposition of force) is a Commonwealth." — The 
Commonwealth of Oceana (1656), p. 4. 

1 In his De la Propriete dans ses Rapports avec le Droit 
Politique (1792). 

2 In his An Essay toward a General History of Feudal Prop- 
erty in Great Britain (1757). 

3 In his Vorrede zur Osnabruckschen Geschichte (1768). See 
the interesting article, "Justus Moser als Geschichtsphilosoph," 
von P. Kampffmeyer, in Die Neue Zeit, XVII, 1, pp. 516- 
524. 

4 As to St. Simon, see P. Barth in Die Zukunft, IV, 449, and 
the same writer's Die Philosophie der Geschichte als Soziologie 
(1897). Cf. The French Revolution and Modern French Social- 
ism, by Jessica Peixotto (1901), pp. 219-221. Both Barth and 
Peixotto exaggerate the influence of St. Simon. For Fourier and 
Le Chevalier, see Wenckstern's book on Marx (1896), pp. 250, 
251. For Proudhon, see Muhlberger, Zur Kentniss des Marxis- 
mus (1894). 



52 ECONOMIC INTERPRETATION 

tion of the political to the economic life. 1 The 
early minor German socialists, such as Marr, 
Hess and Griin, 2 as well as here and there other 
writers, 3 express themselves sporadically in like 
manner. But if originality can properly be 
claimed only for those thinkers who not alone 
formulate a doctrine but first recognize its im- 
portance and its implications, so that it thereby 
becomes a constituent element in their whole 
scientific system, there is no question that Marx 
must be recognized as in the truest sense the 

1 Stein's views were first advanced in 1842, in Der Socialisimis 
und Communismus des heutigen Frankreichs. In a later work, 
published in 1850, Gescliichte der socialen Bewegung in Frank- 
reich, he developed more fully his idea of society as the com- 
munity in its economic organization, and of social, i.e., economic 
growth as the basis of legal and political life. This produced 
a decided effect on Gneist, and through him on much of 
modern German historical jurisprudence. But Stein's doctrine 
exerted little influence on economic thought or historical in- 
vestigation in general. 

2 For some of their statements, see G. Adler, Die Grundlagen 
der Karl Marifschen Kritik der Bestehenden Volkswirthschaft 
(1887), pp. 214-226. For the more general views of these Ger- 
man socialists, see G. Adler, Die Geschichte der ersten Social- 
politischen Arbeiterbewegung in Deutschland (1885). 

3 Cf. a remarkable paragraph in the work of the deservedly 
forgotten Lavergne-Peguilhen, Die Bewegiings- mid Prodnktions- 
gesetze (1838), p. 225, to which Brentano first called attention. 
Mehring has pointed out the slight importance to be attached to 
this advocate of the feudal-romantic school, in his Die Lessing 
Legende nebst einem Anhange liber den Historischen Materialismus 
(1893), pp, 435-441- 



ORIGINALITY OF THE THEORY 53 

originator of the economic interpretation of 
history. 1 

It may be asked, finally, how far the other 
founders of scientific socialism, Rodbertus and 
Lassalle, should share with Marx the honor of 
originating the doctrine of economic interpreta- 
tion of history. The question of the priority 
of view as between Marx and Rodbertus was 
at one time hotly discussed. 2 The controversy, 
however, turned chiefly on the specifically 
socialistic doctrines of labor and surplus value, 
which have in their essentials nothing to do 
with the economic interpretation of history. 
Even as to that point, however, the friends of 
Rodbertus now concede that the charges origi- 
nally preferred against Marx were false. 8 So 

1 Cf. Woltmann, Der Historische Materialismus (1900), p. 
24. 

2 The charge that Marx copied from Rodbertus was first made 
by R. Meyer, Emancipationskampf des Vierten Standes (1875), 
I, 43 ; 2d ed., 1882, pp. 57 and 83, and was repeated by Rodbertus 
himself in a letter to J. Zeller in the Tiibinger Zeitschrift fur die 
Gesammte Staatswissenschaft (1879), P- 21 9- Cf. a ^ s0 Brief e und 
Socialpolitische Aufsatze von Dr. Rodbertics-fagetzow, heraus- 
gegeben von Dr. R. Meyer, n.d. [1880], p. 134. The charge 
was triumphantly refuted by Engels in the preface to Das Elend 
der Philosophie, Deutsch von E. Bernstein (1885), and more 
fully in the preface to the second (German) volume of Das 
Kapital (1885), pp. viii-xxi. 

3 Cf. A. Wagner, in the Introduction to the third volume of 
Aus dem Literarischen Nachlass von Dr. Karl Rodbertus-Jagetzow, 



54 ECONOMIC INTERPRETATION 

far as the economic interpretation of history is 
concerned, there is no claim that Rodbertus 
originated or even maintained the doctrine. 1 

With reference to Lassalle, it would hardly 
be necessary to refer to the matter at all, were 
it not for the fact that a prominent English 
economist has recently implied that the doc- 
trine is first found in his writings. 2 As a 
matter of fact, it is now conceded by the ablest 
students of socialism that Lassalle originated 
none of the important points in theory, even 
though it is true that without the marvellous 
practical sagacity of Lassalle the world at large 
would probably have heard but little of Marx 
and Rodbertus. The International, in the 
hands of Marx, was a fiasco ; practical socialism, 
in the hands of Lassalle, became a powerful 

herausgegeben von Adolph Wagner und Theophil Kozak (1885), 
p. xxxi. 

1 Cf. A. Wagner, in his Grundlegung der Politischen Oekonomie, 
II (3d ed., 1894), pp. 281, 282, where Marx is described as pro- 
ceeding "einseitig entwicklungsgesetzlich, mit den Hilfsmitteln 
seiner materialistischen Geschichtsauffassung," while Rodbertus 
argues " ohne die geschichtlichen und dialectischen Hilfsmittel 
von Marx." Cf. also the essay of Kautsky "Das 'KapitaT von 
Rodbertus," in Die Nene Zeit, II (1884), p. 350. 

2 Bonar, Philosophy and Political Economy (1893), pp. 350, 
35 1, quoting from Lassalle's Workmeti's Programme of 1862. All 
the points mentioned by Mr. Bonar are found in Marx's books of 
1847 and 1859. 



ORIGINALITY OF THE THEORY 55 

political and social force. But while Lassalle 
was a great agitator and statesman, he was not 
a constructive thinker — in economics, at all 
events ; and while Marx was a failure in prac- 
tical life, he was a giant as a closet philosopher. 1 

1 It is much to be regretted that Professor Foxwell, in his 
introduction to the translation of Menger's The Right to the Whole 
Produce of Labour (1899), seems to lend credence to Menger's 
contention that Marx borrowed his theory of surplus value from 
the English socialists, without giving them credit. As every one 
who is familiar with the subject knows, both parts of this state- 
ment are erroneous. It was Marx himself who first called 
attention in detail to the English socialists, quoting extensively 
from Hopkins, Thompson, Edwards and Bray in La Misere de la 
Philosophie (pp. 49-62) ; and to compare their theories to that of 
Marx is like comparing the political economy of Petty to that of 
Ricardo. It must be remembered, however, that the author 
of the book in question is not the economist Carl Menger, but his 
brother Anton, the jurist. 

Professor Ashley must have had these passages in mind when 
he was misled into the hasty characterization of Marx as " a man 
of great ability, but neither so learned nor so original as he 
appeared." See his Surveys, Historic and Economic (1900), 
p. 25. Those who really know their Marx have no such opinion. 
Bohm-Bawerk, one of the chief opponents of Marx's theory of 
surplus value, has often expressed high admiration for his powers, 
and goes so far as to call him a " philosophical genius " and " an 
intellectual force of the highest order." See Karl Marx and the 
Close of his System, by Bohm-Bawerk (1898), pp. 148, 221. If 
for no other reason than for his admirable and profound treat- 
ment of the money problem in the second (German) volume of 
Das Kapital, Marx would occupy a prominent place in the 
history of economics. His earlier works show that he was equally 
strong in other fields of human thought. As for his learning, it 
may suffice to call attention to the fact that Marx was the first 



56 ECONOMIC INTERPRETATION 

Whether or no we agree with Marx's analysis 
of industrial society, and without attempting 
as yet to pass judgment upon the validity of 
his philosophical doctrine, it is safe to say that 
no one can study Marx as he deserves to be 
studied — and, let us add, as he has hitherto 
not been studied in England or America — 
without recognizing the fact that, perhaps with 
the exception of Ricardo, there has been no 
more original, no more powerful, and no more 
acute intellect in the entire history of economic 
science. 

writer to study in detail the history of early English economic 
thought, as well as the first economist to make an effective 
investigation based on the English blue books. 



CHAPTER V 

THE ELABORATION OF THE THEORY 

In the preceding chapters we have studied 
the genesis and the early formulation of the 
doctrine of historical materialism. Before pro- 
ceeding to discuss its applications it may be 
well to obviate some misunderstanding, by 
directing attention to what might be called 
not so much the modifications, as the further 
elaboration, of the theory. 

In saying that the modes of production con- 
dition all social life, Marx sometimes leads us 
to believe that he refers only to the purely 
technical or technological modes of production. 
There are, however, abundant indications in 
his writings to show that he really had in mind 
the conditions of production in general. 1 This 
becomes especially important in discussing the 
earlier stages of civilization, where great changes 

1 The criticisms of Masaryk, Die Philosophischen und Sociolo- 
gischen Grundlagen des Marxismus (1899), pp. 99-100, and of 
Weisengriin, Der Marxismus und das Wesen der Sozialen Frage 
(1900), p. 86, on this point are without foundation. 

57 



58 ECONOMIC INTERPRETATION 

occurred in the general relations of production, 
without much specific alteration in the tech- 
nical processes. The younger Marxists have 
devoted much time and ability to the elucida- 
tion of this point. 

In the first place, even though it is claimed 
that changes in technique are the causes of 
social progress, we must be careful not to take 
too narrow a view of the term. The adherents 
of the theory point out that when we speak of 
technique in social life we must include not 
only the technical processes of extracting the 
raw material and of fashioning it into a finished 
product, but also the technique of trade and 
transportation, the technical methods of busi- 
ness in general, and the technical processes by 
which the finished product is distributed to the 
final consumer. Marx intimated this repeat- 
edly, and Engels has stated it clearly in a let- 
ter, in which he sums up the ideas for which he 
and Marx contended : — 

" We understand by the economic relations, 
which we regard as the determining basis of 
the history of society, the methods by which 
the members of a given society produce their 
means of support and exchange the products 
among each other, so far as the division of labor 



ELABORATION OF THE THEORY 59 

exists. The whole technique of production and 
of transportation is thus included. Furthermore, 
this technique, according to our view, deter- 
termines the methods of exchange, the dis- 
tribution of products and, hence, after the 
dissolution of gentile society, the division of 
society into classes, the relations of personal 
control and subjection, and thus the existence of 
the state, of politics, of law, etc. . . . Although 
technique is mainly dependent on the condition 
of science, it is still more true that science de- 
pends on the condition and needs of technique. 
A technical want felt by society is more of an 
impetus to science than ten universities." * 

1 " Unter den okonomischen Verhaltnissen, die wir als bestim- 
mende Basis der Geschichte der Gesellschaft ansehen, verstehen 
wir die Art und Weise, worin die Menschen einer bestimmten 
Gesellschaft ihren Lebensunterhalt produzieren und die Produkte 
untereinander austauschen (soweit Teilung der Arbeit besteht). 
Also die gesamte Technik der Produktion und des Transports ist 
da einbegriffen. Diese Technik bestimmt nach unserer Auffassung 
auch die Art und Weise des Austausches, weiterhin die Verteilung 
der Produkte und damit, nach der Auflbsung der Gentilgesell- 
schaft, auch die Einteilung der Klassen, damit die Herrschafts- 
und Knechtschaftsverhaltnisse, damit Staat, Politik, Recht, etc. 
Wenn die Technik, wie sie sagen, ja grosstenteils vom Stande der 
Wissenschaft abhangig ist, so noch weit mehr dieses vom Stande 
und den Bedurmissen der Technik. Hat die Gesellschaft ein 
technisches Bediirfhiss, so hilft das die Wissenschaft mehr voran 
als zehn Univeisitaten." — Letter of 1894 in Der Sozialistische 
Akademiker (1895), p. 373. Reprinted in L. Woltmann, Der 
Historische Materialismns (1900), p. 248. 



60 ECONOMIC INTERPRETATION 

The term " technical " must thus be broadened 
to include the whole series of relations between 
production and consumption. It is for this 
reason that we speak not so much of the tech- 
nical interpretation of history — which would 
lead to misunderstanding — as of the economic 
interpretation of history.- 

The originators of the theory, moreover, go 
still further. When they speak of the material- 
istic or economic conception of history, they 
not only refuse to identify " economic " with 
" technical " in the narrow sense, but they do 
not even mean to imply that " economic " ex- 
cludes physical factors. It is obvious, for in- 
stance, that geographical conditions, to some 
degree and under certain circumstances, affect 
the facts of production. To the extent that 
Buckle pointed this out, he was in thorough 
accord with Marx; but the geographical condi- 
tions, as Marx has himself maintained, form 
only the limits within which the methods of 
production can act. While a change of geo- 
graphical conditions may prevent the adoption 
of new methods of production, precisely the 
same geographical conditions are often com- 
patible with entirely different methods of pro- 
duction. Thus, Marx tells us: — 



ELABORATION OF THE THEORY 61 

" It is not the mere fertility of the soil, but 
the differentiation of the soil, the variety of its 
natural products, the changes of the seasons, 
which form the physical basis for the social 
division of labor, and which, by changes in the 
natural surroundings, spur man on to the mul- 
tiplication of his wants, his capabilities, his 
means and modes of labor. It is the necessity 
of bringing a natural force under the control 
of society, of economizing, of appropriating or 
subduing it on a large scale by the work of 
man's hand, that first plays the decisive part 
in the history of industry." 1 

He goes on to explain, however, that "favor- 
able natural conditions alone give us only the 
possibility, never the reality," of definite eco- 
nomic methods of production and distribution 
of wealth. In the same way, Engels concedes 
that the geographical basis must be included in 
enumerating the economic conditions, but con- 
tends that its importance must not be exagger- 
ated. 

This is, however, by no means the most 
important elaboration of the theory. In the 
interval that elapsed between the first state- 
ment of the theory in the forties and the death 

1 Capital (English translation), p. 523. 



62 ECONOMIC INTERPRETATION 

of Marx, the founders of the doctrine had little 
reason to moderate their statements. After the 
death of Marx, however, and especially when 
the theory began to be actively discussed in the 
social-democratic congresses, the extreme claims 
of the orthodox Marxists began to arouse dis- 
sent even in the ranks of the socialists them- 
selves. Partly as a result of this, partly because 
of outside criticism, Engels now wrote a series 
of letters in which he endeavored to phrase his 
statement of the theory so as to meet some of 
the criticisms. In these letters 1 he maintained 
that Marx had often been misunderstood, and 
that neither he himself nor Marx ever meant to 
claim an absomte validity for economic consid- 
erations to the exclusion of all other factors. 
He pointed out that economic actions are not 
only physical actions, but human actions, and 
that a man acts as an economic agent through 
the use of his head as well as of his hands. 

1 Engels's letters, written to various correspondents between 
1890 and 1894, appeared originally in two newspapers, the 
Leipziger Volkszeitung (1895), no. 250, and Der Sozialistische 
Akademiker, October 1 and 15, 1895. They have been reprinted, 
although not all of them in any one place, by Woltmann, Der 
Historische Materialis7nus (1900), pp. 242-250 ; by Masaryk, Die 
Grundlagen des Marxismus (1899), pp. 104; by Mehring, 
Geschichte der Deutschen Sozialdemokratie, zweiter Theil (2d ed.), 
p. 556; and by Greulich, Ueber die Materialistische Geschichts- 
auffassung (1897), p. 7. 



ELABORATION OF THE THEORY 63 

The mental development of man, however, is 
affected by many conditions ; at any given time 
the economic action of the individual is influ- 
enced by his whole social environment, in which 
many factors have played a role. Engels con- 
fessed that Marx and he were " partly responsi- 
ble for the fact that the younger men have 
sometimes laid more stress on the economic side 
than it deserves," and he was careful to point out 
that the actual form of the social organization is 
often determined by political, legal, philosophi- 
cal and religious theories and conceptions. In 
short, when we read the latest exposition of 
their views by one of the founders themselves, it 
almost seems as if the whole theory of economic 
interpretation had been thrown overboard. 

It would be a mistake, however, to suppose 
that these concessions, undeniably significant 
as they are, involved in the minds of the leaders 
an abandonment of the theory. Engels con- 
tinued to emphasize the fundamental signifi- 
cance of the economic life in the wider social 
life. The upholders of the doctrine remind us 
that, whatever be the action and reaction of 
social forces at any given time, it is the condi- 
tions of production, in the widest sense of the 
term, that are chiefly responsible for the basic 



64 ECONOMIC INTERPRETATION 

permanent changes in the condition of society. 
Thus, Engels tells us that we must broaden 
our conception of the economic factor so as 
to include among the economic conditions, not 
only the geographical basis, but the actually 
transmitted remains of former economic changes, 
which have often survived only through tradi- 
tion, or vis inertice, as well as the whole exter- 
nal environment of this particular form. He 
even goes so far as to declare the race itself 
to be an economic factor. And while he still 
stoutly contends that the political, legal, reli- 
gious, literary and artistic development rests on 
the economic, he points out that they all react 
upon one another and on the economic foun- 
dation. " It is not that the economic situation 
is the cause, in the sense of being the only 
active agent, and that everything else is only a 
passive result. It is, on the contrary, a case of 
mutual action on the basis of the economic 
necessity, which in last instance always works 
itself out." 1 

1 " Ferner sind einbegriffen unter den okonomischen Verhalt- 
nissen die geographische Grundlage, worauf diese sich abspielen, 
und die thatsachlich uberlieferten Reste friiherer dkonomischer 
Entwicklungsstufen, die sich forterhalten haben, oft nur durch 
Tradition oder vis inertiae, naturlich auch das diese Gesellschafts- 
form nach aussenhin umgebende Milieu. . . . 

" Wir sehen die okonomischen Bedingungen als das in letzter 



ELABORATION OF THE THEORY 65 

A controversy that has arisen since Engels's 
death may serve to bring out the thought more 
clearly. A number of suggestive writers, of 
whom Gumplowicz 1 is perhaps the most impor- 
tant, have attempted to explain some of the 
leading facts in human development by the 
existence of racial characteristics and race con- 
tests. Yet we now have an interesting work 
by a Frenchman, who does not even profess 
himself an advocate of the economic interpreta- 
tion of history, maintaining, with some measure 
of success, that the majority of different racial 
characteristics are the results of socio-economic 
changes which are themselves referable to 
physico-economic causes. Demolins, the chief 
representative to-day of the school of LePlay, 
has — at least, so far as appears from his writ- 
ings — never even heard of Marx or his theory, 
and we find in his work very little of the detail 

Instanz die geschichtliche Entwicklung Bedingende an. Aber 
die Rasse ist selbst ein okonomischer Faktor. . . . Diepolitische, 
rechtliche, philosophische, religiose, litterarische, kunstlerische, 
etc., Entwicklung beruht auf der Skonomischen. Aber sie alle 
reagieren auch auf einander und auf der okonomischen Basis. 
Es ist nicht, dass die okonomische Lage Ursache, allein aktiv ist 
und alles andere nur passive Wirkung. Sondern es ist Wechsel- 
wirkung auf Grundlage der in letzter Instanz stets sich durch- 
setzenden okonomischen Notwendigkeit. . . ." — Letter of 1 894, 
Der Sozialistische Akademiker. 
1 Der Rassenkampf. 



66 ECONOMIC INTERPRETATION 

of the class conflict which primarily interested 
the socialists. But while Demolins * reverts in 
essence to what might be called the commercio- 
geographical explanation of history, he is care- 
ful to point out how the conditions of physical 
life affect the methods and relations of produc- 
tion, and how these in turn are largely respon- 
sible for the differentiation of mankind into 
the racial types that have played a role in his- 
tory. Thus, from his point of view, the race is 
largely an economic product, and we begin to 
understand what Engels meant when he declared 
the race itself to be an economic factor. 

The theory of economic interpretation thus 
expounded by Engels must be considered 
authoritative. He tells us that Marx never 
really regarded the situation in any other light. 
Nevertheless, it cannot be denied that there 
are passages in Marx which seem to be more 
extreme, and which represent the doctrine in 
that cruder form which is so frequently met 
with among his uncritical followers. We are 
bound, however, to give him the benefit of the 
doubt, and we must not forget that when a new 
theory supposed to involve far-reaching prac- 

1 Edmond Demolins, Continent la Route cree le Type Social, 
Essai de Geographie Sociale, n.d. [1901]. 



ELABORATION OF THE THEORY 67 

tical consequences is first propounded, the 
apparent needs of the situation often result in 
an overstatement, rather than an understate- 
ment, of the doctrine. 

We understand, then, by the theory of eco- 
nomic interpretation of history, not that all his- 
tory is to be explained in economic terms alone, 
but that the chief considerations in human 
progress are the social considerations, and that 
the important factor in social change is the 
economic factor. Economic interpretation of 
history means, not that the economic relations 
exert an exclusive influence, but that they 
exert a preponderant influence in shaping the 
progress of society. 

So much for a preliminary statement of the 
real content of the economic conception of his- 
tory, as explained and elaborated by the found- 
ers themselves. In a subsequent chapter we 
shall revert to this point and attempt to analyze 
somewhat more closely the actual connection 
between the economic and the wider social 
relations of mankind. 



CHAPTER VI 

RECENT APPLICATIONS OF THE THEORY 

Let us now proceed to study some of the 
applications that have been made of the theory 
of the economic interpretation of history. We 
can pursue this study without prejudicing the 
final decision as to the truth of the doctrine in 
its entirety ; for it is obvious that we may refuse 
to admit the validity of the theory as a philo- 
sophical explanation of progress as a whole, 
and yet be perfectly prepared to admit that 
in particular cases the economic factor has 
played an important role. It is natural, how- 
ever, that the economic influence in any given 
set of facts should be emphasized primarily 
by those whose general philosophical attitude 
would predispose them to search for economic 
causes. It will not surprise us, then, to find 
that much good work in this direction has been 
accomplished by the originators of the theory 
and their followers. 

Marx himself made no mean contribution to 

68 



APPLICATIONS OF THE THEORY 69 

the facts. Some of his statements are erroneous, 
and not a few of his historical explanations are 
farfetched and exaggerated ; but there remains 
a considerable substratum of truth in his con- 
tributions to the subject. Of these contribu- 
tions the most familiar is the account of the 
transition from feudal to modern society, due 
to the genesis in the seventeenth century of 
capital as a dominant industrial factor and to 
the industrial revolution of the eighteenth cen- 
tury. It was Marx who first clearly pointed 
out the nature of the domestic system and its 
transformation into the factory system of our 
age, with the attendant change from the local 
to the national market, and from this in turn 
to the world market. It was Marx, again, who 
called attention to the essential difference 
between the economic life of classic antiquity 
and that of modern times, showing that, while 
capital played by no means an insignificant 
role in ancient times, it was commercial and 
not industrial capital, and that much of Greek 
and Roman history is to be explained in the 
light of this fact. It was Marx, too, who first 
disclosed the economic forces which were chiefly 
responsible for the political changes of the mid- 
dle of the nineteenth century. And, finally, 



70 ECONOMIC INTERPRETATION 

while Marx had originally devoted compara- 
tively little attention to primitive civilization, 
we now know that in his manuscript notes he 
applied his doctrine in a suggestive way to the 
very first stages of social evolution. 1 

It is perhaps in the early history of mankind 
that the most signal additions to our knowl- 
edge have been made by recent writers. The 
pioneer in this field was our great compatriot 
Morgan. Morgan was really the first to explain 
the early forms of human association and to 
trace society through the stages of the horde, 
the clan, the family and the state. Moreover, 
although he did not work it out in detail or 
give his theory any name, there is no doubt 
that he independently advanced the doctrine 
of the economic interpretation of history, with- * 
out being aware of the fact that it applied to 
anything but the early stages. Because of the 
great neglect by subsequent writers of this part 
of Morgan's achievements, it is necessary to 
call attention to it at somewhat greater length. 

Morgan starts out with the guarded state- 
ment that it is " probable that the great epochs 

1 These notes are used by Engels in his Der Ursftrung der 
Familie, des Privateigenthums und des Staats (1884). See 
Preface to first edition. 



APPLICATIONS OF THE THEORY 71 

of human progress have been identified more 
or less directly with the enlargement of the 
sources of subsistence." 1 The great epochs of 
which he speaks, however, cease, in his opinion, 
with the introduction of field agriculture. 2 He 
discusses the assumption of original promiscuity 
in the human race, and maintains that, while it 
probably existed at first, it is not likely that it 
was long continued in the horde, because the 
latter would break up into smaller groups for 
subsistence and fall into consanguine families. 3 
In his treatment of the dependence of early 
man upon the physical characteristics of the 
food supply, he takes up in turn the early 
natural subsistence upon fruits and roots, the 
connection of fish subsistence with savagery 
and migration, the relations between the dis- 
covery of cereals, the cessation of cannibalism 
and the reliance on a meat and milk diet, the 
connection between the domestication of ani- 
mals and pastoral society, and, finally, the 
transition of what he calls horticulture into 
agriculture. 4 In all this we seem to be get- 

1 Lewis H. Morgan, Ancient Society (1877). The following 
quotations are from the edition of 1878, p. 19. Cf. p. 9. 

2 Ibid., p. 26. 3 Ibid., p. 418. 

4 Ibid., pp. 20-26. Morgan's " horticulture " is really the 
same as the " hoeculture " or " hackculture " which has recently 



72 ECONOMIC INTERPRETATION 

ting little beyond Buckle. What differentiates 
Morgan entirely from Buckle, however, is the 
fact that, while the latter confines himself to 
the simple problem of production, Morgan 
works out the influence of all these factors 
upon the social and political constitution and 
traces the transformation of society to changes 
in the form and conditions of property. 

Although Morgan did not succeed in making 
thoroughly clear the economic causes of the 
early tracing of descent from the female line, 
he did call attention to the connection between 
the growth of private property and the evolu- 
tion of the horde into the clan or, as he calls 
it, the gens. 1 He elucidated still more clearly 
the causes of the change of descent from the 
female to the male line, showing how it went 
hand in hand with the extension of the insti- 
tution of private property. 2 The account of 

been heralded by German writers, like Hahn and Schmoller, 
as a great discovery of their compatriots. Both terms are ill 
chosen. 

1 " With the institution of the gens came in the first great 
rule of inheritance which distributed the effects of a deceased 
person among his gentiles." — Ancient Society, p. 528. 

2 " After domestic animals began to be reared in flocks and 
herds, becoming thereby a source of subsistence as well as 
objects of individual property, and after tillage had led to the 
ownership of houses and lands in severalty, an antagonism would 
be certain to arise against the prevailing form of gentile inheri- 



APPLICATIONS OF THE THEORY 73 

the development of slavery 1 is perhaps not so 
novel ; but the suggestion of an economic basis 
for the transition from the clan to the patriar- 
chal family 2 and from the polygamic to the 
monogamic family 8 was as striking as it was 
original. 

While Morgan was in no way an economist, 

tance, because it excluded the owner's children whose paternity- 
was becoming more assured, and gave his property to his gentile 
kindred. A contest for a new rule of inheritance, shared in by 
the fathers and their children, would furnish a motive sufficiently 
powerful to effect the change. With property accumulating in 
masses, and assuming permanent forms, and with an increased 
proportion of it held by individual ownership, descent in the 
female line was certain of overthrow, and the substitution of the 
male line equally assured. Such a change would leave the in- 
heritance in the gens as before, but it would place children in 
the gens of their father and at the head of the agnatic kindred." 

— Lewis H. Morgan, Ancient Society (1877), pp. 345-346. Cf. 

P- 53 1 - 

1 Ibid., p. 341, et passim. 

2 The patriarchal family is summed up as " an organization of 
servants and slaves under a patriarch for the care of flocks and 
herds, for the cultivation of lands and for mutual protection and 
subsistence. Polygamy was incidental." — Ibid., p. 504. Cf. 
pp. 465-466. 

3 " The growth of property and the desire for its transmission 
to children was in reality the moving power which brought in 
monogamy to insure legitimate heirs and to limit their number 
to the actual progeny of the married pair." — Ibid., p. 477. 

"As finally constituted, the monogamian family assured the 
paternity of children, substituted the individual ownership of real 
as well as of personal property for joint ownership, and an 
exclusive inheritance by children instead of agnatic inheritance." 

— Ibid., p. 505. Cf. p. 389. 



74 ECONOMIC INTERPRETATION 

and had probably never heard either of Marx 
or of the historical school of economics, his 
final conclusion as to the relations of private 
property to social welfare is in substantial 
agreement with modern views. He tells us 
that 

"since the advent of civilization the out- 
growth of property has been so immense, its 
forms so diversified, its uses so expanding and 
its management so intelligent in the interests 
of its owners, that it has become, on the part 
of the people, an unmanageable power. The 
human mind stands bewildered in the presence 
of its own creation. The time will come, 
nevertheless, when human intelligence will rise 
to the mastery over property, and define the 
relations of the state to the property it protects 
as well as the obligation and the limits of the 
rights of its owners. The interests of society 
are paramount to individual interests and the 
two must be brought into just and harmonious 
relations." 1 

The greater part of Morgan's book as well 
as of his other works 2 was, however, devoted 

1 Ancient Society, p. 552. 

2 The League of the Iroquois (1849, reprinted in 1902) ; Systems 
of Consanguinity and Affinity of the Human Family (1871); 
and Houses and House Life of the American Aborigines (1881). 



APPLICATIONS OF THE THEORY 75 

to an account of the historical facts themselves, 
rather than of their economic causes. The 
controversy which at once sprang up in Eng- 
land, and which has lasted almost to the 
present time, turned well-nigh exclusively upon 
the first set of considerations. When scientists 
were not agreed upon the facts it would seem 
useless to speculate about the causes of the 
facts. The trend given to the discussion by 
this early controversy is largely responsible for 
the fact that until very recently writers on 
sociology or social history have almost com- 
pletely neglected the economic aspect of the 
transitions which they describe. 1 But, although 
some parts of Morgan's theory — like the 
details of the earliest consanguine family and 
the perhaps somewhat hasty generalization as 
to primitive promiscuity — have been modified, 

1 This is true of McLennan, Westermaarck, Starcke, Tyler, 
Lumholtz, Post and many others. It is true also, although to 
a somewhat less degree, of my honored colleague, Professor 
Giddings. Almost the only passage of importance for our pur- 
poses in his Principles of Sociology (1896) is the one on p. 266 : 
" It seems to be an economic condition which in the lowest com- 
munities determines the duration of marriage and probably also 
the line of descent through mothers or fathers." Cf., however, 
in addition, pp. 276, 288 and 296. In a more recent article 
Professor Giddings substantially concedes that " these writers 
[Marx and his followers] may be held to have made good their 
main contention." — International Monthly, II (1900), p. 548. 



76 ECONOMIC INTERPRETATION 

the substance of his account of the uterine or 
maternal clan and of its development into the 
tribe and the state, as well as of the dependence 
of the transition upon changes in the forms of 
property, have become incorporated into the 
accepted material of modern science. 

It was not, however, until the German advo- 
cates of the economic interpretation of history- 
took the matter up that Morgan's real impor- 
tance was recognized. Engels published in 
1884 his Origin of the Family, in which he 
showed that Morgan's views marked a distinct 
advance upon those of Bachofen and Mc- 
Lennan, and claimed that the English archae- 
ologRrs of the day had really adopted Morgan's 
theory without giving him credit. Turning 
from the account of the development to its 
causes, Engels accepted all of Morgan's con- 
clusions as to the early uterine society and the 
development of monogamy, but carried them 
one step further by combining, as he tells us, 
Morgan and Marx. Engels ascribed the trans- 
formation of gentile society to the first great 
social division of labor — the separation of 
pastoral tribes from the rest of society. This 
in itself gave rise to intertribal exchange as a 
permanent factor in economic life, and it was 



APPLICATIONS OF THE THEORY 77 

not long before intertribal exchange led to 
barter between individuals — a barter chiefly 
in cattle and natural products. With the tran- 
sition from common to private property in such 
movables, the ground was prepared, on the one 
hand, for slavery and, on the other, for the 
downfall of the matriarchate. As private 
property increased we find the second great 
step in the division of labor, — the separation 
of manual industry from agriculture. Ex- 
change now becomes an exchange of commodi- 
| ties, and with the economic supremacy of the 
imale there appear the patriarchate and then 
Ithe monogamic family. Finally, comes the 
third step in the division of labor, — the rise of 
the merchant class, with the use of metallic 
money. The growth of capital, even if it be 
mercantile capital (as against the original cattle 
capital), ushers in a state of affairs with which 
the old gentile organization is no longer able 
to cope ; and thus we find the origin of the 
political organization, the genesis of the state. 
In Greece, in Rome and in the Teutonic races 
of the early middle ages this transition is a 
matter of record; but no one before Morgan 
and Engels had been able to explain it 
intelligibly. 



?8 ECONOMIC INTERPRETATION 

The hints thrown out by Morgan and Engels 
have been worked up by a number of writers, 
few of whom can be classed as socialists. At 
first the professed sociologists paid but little 
attention to the matter. With Kovalevsky, in 
1890, we begin the series of those who at- 
tempted to prove a somewhat closer connec- 
tion between the family and private property. 1 
In 1896 Grosse devoted a separate volume to 
the subject 2 and brought out some new points 
as to the influence of economic conditions 
upon the character of the family, especially in 
the case of nomadic peoples and the early agri- 
culturists. In the same year Professor Hilde- 
brand published an admirable work on Law 
and Custom in the Different Economic Stages, 
in which, although not neglecting the earlier 
phases of social life, he laid the emphasis on 
the economic basis of the primitive agricultural 
community. 3 For the still earlier period note- 
worthy work has been done by Cunow. After 
having prepared the way by a study of the sys- 

1 Maxime Kovalevsky, " Tableau des origines et de revolution 
de la famille et de la propriete," Skrifter utgifna af Lorenska 
Stiftelsen (Stockholm, 1890). 

2 Die Formen der Familie tmd die Formen der Wirthschaft 
(1896). 

3 Recht und Sitte auf den Verschiedenen Wirthschaftlichen 
Kulturstufen, Erster Theil (1896). 



APPLICATIONS OF THE THEORY 79 

terns of consanguinity among the Australians 1 
Cunow published in 1898 a series of articles on 
the economic basis of the matriarchate. 2 He 
emphasized the essential weakness, from the 
historical point of view, of the ordinary classi- 
fication into hunting, pastoral and agricultural 
stages. 3 Beginning, however, with the hunting 
stage, Cunow maintains that the earliest form 
of organization rests on the supremacy of the 
man, which is not by any means the same thing 
as the supremacy of the father; for the poly- 
gamic or monogamic family which forms the 
basis of the patriarchal system was of much 
later development. In the early stages we may 
have a uterine society — that is, a tracing of 
descent through the mother — but we have no 
matriarchate. 4 Cunow gives the economic rea- 

1 Die Verwandschaftsorganisationen der Australneger (1894) . 

2 " Die okonomischen Grundlagen der Mutterherrschaft," in 
Die Neue Zeit, XVI, p. 1. A French version appeared in Le 
Devenir Social, V (1898), pp. 42, 146, 330, under the title " Les 
bases economiques du matriarcat." 

3 Die Neue Zeit, XVI, p. 108. Cunow, however, does not remind 
us that all this had been pointed out in 1884 by Dargun in his 
admirable study, which is not so well known as it ought to be : 
" Ursprung und Entwicklungsgeschichte des Eigenthums," in the 
Zeitschrift fur Vergleichende Rechtswissenschaft, V, especially pp. 
59-61. Professor Giddings, in his article in the Political Science 
Quarterly 'for June, 1901 (XVI, 204), alludes to the older theory as 
based on " the Mother-Goose philosophy of history." Dargun 
and Cunow are the writers who have emancipated us. 

4 Die Neue Zeit, XVI, p. 115. 



80 ECONOMIC INTERPRETATION 

sons which explain this tracing of the descent 
through the female, and shows how, under cer- 
tain conditions, she becomes more sought after 
until finally she attains such an economic im- 
portance that the matriarchate itself develops. 1 
Incidentally he traces the connection between 
the female and early agriculture, and explains 
how her growing importance, both in and out 
of the home, exerted a decided influence upon 
the early division of labor. The matriarchate 
is shown very clearly to be largely an economic 
product. 2 

In 1 90 1 Cunow followed up his exposition 
by another series of essays on " The Division 
of Labor and the Rights of Women." s Here 
he points out the error of the usual statement 
that agriculture is a condition precedent to a 
disappearance of the nomadic life. On the 
contrary, maintains Cunow, a certain degree of 
stationary settled activity is a condition prece- 
dent to the transition to agriculture. 4 Agricul- 
ture, however, may develop either out of the 

1 Die Nene Zeit, XVI, pp. 141, 176, 209. 

2 Ibid., pp. 238, 241. 

3 " Arbeitstheilung und Frauenrecht ; zugleich ein Beitrag 
zur materialistischen Geschichtsauffassung," in Die Neue Zeit, 
XIX, p. 1. 

4 Ibid., p. 103. 



APPLICATIONS OF THE THEORY 81 

pastoral stage or out of the hunting stage, and 
in each case the activity of the female is of car- 
dinal importance. The female is not only the 
primitive tiller of the soil, but also the creator 
of the earliest house industry, which plays such 
a distinctive role in primitive barter. 1 The 
earliest division of labor rests on the principle 
that the female attends to the vegetable suste- 
nance, the man to the animal diet, and on this 
fundamental distinction all the other social ar- 
rangements are built up. Marriage, for a long 
time, is not an ethical community of ideal inter- 
ests, but very largely an economic or labor 
relation. 2 

Of much the same character as this investi- 
gation are the attempts made still more re- 
cently to supply an economic explanation for 
the origin of totemism 3 and to study the eco- 
nomic causes of slavery. Especially on the 

1 " Arbeitstheilung und Frauenrecht ; zugleich ein Beitrag zur 
materialistischen Geschichtsauffassung," in Die Neue Zeit, 
XIX, pp. 152, 180. 

2 Ibid., p. 276. 

3 Dr. Julius Pikler : Der Ursprung des Totemismus ; ein 
Beitrag zur Materialistischen Geschichtstheorie (Berlin, 1900). 
A somewhat different, but equally " materialistic, 1 ' interpretation 
has been given by Frazer, in the Fortnightly Review for 1899, 
and by Professor Giddings, in a note on "The Origin of 
Totemism and Exogamy " in the Annals of the American 
Academy of Political and Social Science, XIV, p. 274. 

G 



82 ECONOMIC INTERPRETATION 

latter topic our knowledge of the early condi- 
tions has been greatly increased by the detailed 
study of Nieboer. 1 Nieboer, who accepts the 
theory of the brilliant Italian economist Loria, 
has overturned many of the former notions on 
the subject and has studied slavery, not only, as 
most writers have done, in the agricultural stage 
of society, but also in the hunting, fishing and 
pastoral stages. Coming to the later period of 
classic antiquity, Ciccotti has shed considerable 
light on the origin and development of slavery 
in Greece, as well as in Rome, and has traced 
the connection between this fundamental fact 
and the entire political and social history. 2 
Other writers, such as Francotte 3 and Pohl- 
mann, 4 have considered more in detail the 
economic status of Greece and its influence 
on national and international conditions. 

1 Dr. H. J. Nieboer: Slavery as an Industrial System (The 
Hague, 1900). See the review of this work in the Political 
Science Quarterly, September, 1901. 

2 Ettore Ciccotti : 77 Tramonto della Schiavitic nel Mondo 
Antico (Torino, 1899) . The suggestive sketch of the whole topic 
by Eduard Meyer, in his address Die Sklaverei im Alterthum 
(1898), suffers in some important points from the fact that the 
well-known historian is only imperfectly acquainted with the 
results of recent economic studies. 

3 Francotte, D Industrie dans la Grece Ancienne (1901). 

4 Pohlmann, Geschichte des Antiken Sozialismus und Commu- 
nismus (1901). 



APPLICATIONS OF THE THEORY 83 

In the case of Roman history the relation 
between the land question and national pro- 
gress has always been so obvious that such 
historians as Nitzsch and Mommsen did not 
have to wait for the rise of the school of eco- 
nomic interpretation. Even in the case of 
Rome, however, good work has since then been 
done, especially in the imperial period, in em- 
phasizing the controlling influence of economic 
factors on the general devolopment. 1 So, also, 
some neglected points in the history of Hebrew 
antiquity have been brought out by writers like 
Beer and Mehring. 2 

When we come to more recent periods of 
history there is an embarrassment of riches. 
The economic forces which were instrumental 
in shaping the transition from feudal to mod- 
ern society are so obvious that the historians 
have for some time been laying stress on eco- 
nomic interpretation almost without knowing 
it. This is true, for instance, in the treatment 

1 Cf. the series of essays by Paul Ernst on " Die sozialen 
Zustande im romischen Reiche vor dem Einfall der Barbaren," 
in Die Neue Zeit, XI (1893), p. 2, and the suggestive book of 
Deloume, Les Manieurs d? Argent a Rome (1892). 

2 M. Beer, " Ein Beitrag zur Geschichte des Klassenkampfes 
im hebraischen Alterthum," Die Neue Zeit, XI (1893), 1, p. 444. 
For similar studies by Kautsky and Lafargue, see Mehring, Die 
Lessing-Legende, p. 481. 



84 ECONOMIC INTERPRETATION 

of the military system, which has been clearly 
described by Biirkli in his account of the transi- 
tion in Switzerland. 1 One of the most accom- 
plished of Belgian historians, Des Marez, has 
recently voiced his conviction that " no one can 
investigate the deeper causes that have in- 
fluenced the peoples between the Rhine and 
the North Sea without perceiving that it is 
above all the economic conditions, and not 
racial, linguistic or other factors, that have 
determined national progress." 2 

The newer view has led investigators to ac- 
centuate the economic factor not only in the 
Crusades 3 but also in the Reformation with 
the victory of Calvinism and Puritanism. 4 The 

1 Karl Biirkli, Der Wahre Winkelried '; die Taktik der Alt en 
Urschweizer, 1886. See especially pp. 143-184. Cf. also the 
same author's Der Ursprung der Eidgenossenschaft aus der 
Markgenossenschaft und die Schlacht am Morgarten, 1891. In 
this monograph emphasis is laid on the economic origin of the 
Swiss democracy in general. 

2 G. Des Marez, Les Luttes Sociales en Flandre au Moyen 
Age, 1900, p. 7. 

3 Cf. the article by Prutz, " The Economic Development of 
Western Europe under the Influence of the Crusades," The Inter- 
national Monthly, IV (August, 1901), 2, p. 251. 

4 See especially Engels, Der deidsche Bauemkrieg; Bernstein's 
essay on " The Socialistic Currents during the English Revolu- 
tion " in Die Ceschichte des Sozialisjnus in Einzeldarstellungen, 
I, 2, and published as a separate work under the title Commu- 
nistische und Demokratisch-socialistische Stromungen in der Eng- 



APPLICATIONS OF THE THEORY 85 

professed historians themselves have been so far 
influenced by the movement that Lamprecht, 
one of the most distinguished of German schol- 
ars, has recently made the economic factor the 
very foundation of the entire political and social 
development of mediaeval Germany. 1 In the 
acrimonious discussion that this " audacious " 
move has engendered, and which is not yet 
concluded, the gradual triumph of the newer 
tendency seems by no means improbable. 2 

When we approach the centuries nearer our 
own time, it has almost become a commonplace 
to explain in economic terms the political tran- 
sition of England in the eighteenth century, as 
well as the French and American revolutions. 
To take only a few examples from more recent 

lischen Revolution des XVII Jahrhunderts, 1895 ; Kautsky, 
Communism in Central Europe in the Time of the Reformation, 
1 897, and Belfort Bax's study on the Social Side of the German 
Reformation, of which two volumes have thus far appeared under 
the titles : German Society at the Close of the Middle Ages, 1894, 
and The Peasants' 1 War, 1899. 

1 Lamprecht, Deutsche Geschichte. Few economists or eco- 
nomic historians would deny, however, that Professor Lamprecht 
has been unfortunate in selecting as the important factor what is 
generally regarded as a secondary rather than a primary phe- 
nomenon. The change from a natural to a money economy, which 
Lamprecht emphasizes, is itself the result of antecedent economic 
forces. 

2 Lamprecht's general views may be found in his Alte und 
Neue Richtung in der Geschichtswissenschaft and Was ist Kill- 



86 ECONOMIC INTERPRETATION 

events, it is no longer open to doubt that the 
democracy of the nineteenth century is largely 
the result of the industrial revolution ; that the 
entire history of the United States to the Civil 
War was at the bottom a struggle between 
two economic principles ; that the Cuban insur- 
rection against Spain, and thus indirectly the 
Spanish-American War, was the outcome of 
the sugar situation ; or, finally, that the condi- 
tion of international politics at present is 
dominated by economic considerations. Wher- 
ever we turn in the maze of recent historical 
investigation, we are confronted by the over- 
whelming importance attached by the younger 
and abler scholars to the economic factor in 
political and social progress. 

turgeschichte ? 1896. A list of some recent articles on the 
controversy may be found in Ashley, Surveys, Historic and 
Economic, p. 29. To these may now be added the article of 
Below in the Historische Zeitschrift, LXXXVI (1900), 1, and 
the French books of Lacombe, De VHistoire considiree co7nme 
Science, 1894 and Seignobos, La Methode Historique appliquee 
atix Sciences Sociales, 1901. Perhaps the most striking work of 
this nature that has been accomplished by an American scholar 
is the article of E. V. D. Robinson, "War and Economics in 
History and Theory," Political Science Quarterly, XV (1900), 
pp. 581-586. 



PART II 

CRITICISM OF THE THEORY OF ECONOMIC 
INTERPRETATION 



CHAPTER I 

FREEDOM AND NECESSITY 

We come now to the most important part of 
the subject, — a consideration, namely, of the 
objections that have been urged to the doctrine 
here under discussion. Some of these objec- 
tions, as we shall learn later, are indeed weighty 
but others possess only a partial validity. Yet 
the emphasis is commonly put by the critics of 
economic interpretation on the weak, rather 
than on the sound, arguments. It will be advis- 
able, then, to consider first and at greater length 
some of these alleged objections, reserving for 
later treatment those criticisms which possess 
greater force. 

Among the criticisms commonly advanced 
the more usual may be summarized as follows : 
first, that the theory of economic interpretation 
f is a fatalistic theory, opposed to the doctrine of 
free will and overlooking the importance of great 
men in history; second, that it rests on the 
assumption of " historical laws " the very exist- 



90 ECONOMIC INTERPRETATION 

ence of which is open to question ; third, that it 
is socialistic ; fourth, that it neglects the ethical 
and spiritual forces in history ; fifth, that it leads 
to absurd exaggerations. 

It will be observed that these criticisms fall 
into two categories. The one category takes 
exception, not only to the economic interpreta- 
tion of history, but to the general social in- 
terpretation of history. The other class of 
objections does not deny that the controlling 
forces of progress are social in character, but 
contends that we must not confound economic 
with social considerations and that the economic 
factor is of no more importance than any of the 
other social factors. In the above list the first 
and second criticisms are to be included in the 
former category ; the third and fifth in the lat- 
ter ; while the fourth criticism is so broad that 
it falls partly in each category. 

We begin with the first class of criticisms 
because some writers think that they are tri- 
umphantly refuting the economic interpretation 
of history, when they are in reality directing 
their weapons against a far more comprehensive 
structure of ideas, which very few of the oppo- 
nents of the economic interpretation of history 
would like to see demolished. Let us consider, 



FREEDOM AND NECESSITY 91 

then, the objection that the doctrine is fatalistic, 
that it is opposed to the theory of free will, and 
that it overlooks the importance of great men in 
history. 1 

It is obvious that this is not the place to enter 
into a general philosophical discussion of deter- 
minism. For our purposes it is sufficient to 
state that if by freedom of the will we simply 
mean the power to decide as to an action, there 
is no necessary clash with the doctrine of eco- 
nomic or social interpretation. The denial of 
this statement involves a fallacy, which in its 
general aspects has been neatly hit off by 
Huxley: — 

" Half the controversies about the freedom of 
the will . . . rest upon the absurd presumption 
that the proposition " I can do as I like " is 
contradictory to the doctrine of necessity. The 
answer is: nobody doubts that, at any rate 
within certain limits, you can do as you like. 
But what determines your likings and dislik- 

1 Professor Ashley, for instance, resolves the whole question 
into " another form of the eternal problem of the universe : 
Necessity or Free Will." Surveys, Historic and Economic, p. 26. 
Mr. Bonar, in his temperate and interesting article on the subject, 
seems to come dangerously near to this position in speaking of 
the " helplessness " of society. See " Old Lights and New in Eco- 
nomic Study," Economic Journal, viii, p. 444. 



92 ECONOMIC INTERPRETATION 

ings? . . . The passionate assertion of the 
consciousness of their freedom, which is the 
favorite refuge of the opponents of the doctrine 
of necessity, is mere futility, for nobody denies 
it. What they really have to do if they would 
upset the necessarian argument, is to prove that 
they are free to associate any emotion whatever 
with any idea however, to like pain as much as 
pleasure ; vice as much as virtue ; in short, to 
prove that, whatever may be the fixity of order 
of the universe of things, that of thought is 
given over to chance." * 

In other words, every man has will power and 
may decide to act or to refrain from acting, thus 
showing that he is in this sense a free agent. 
But whether he decides in the one way or the 
other, there are certain causes operating within 
the organism which are responsible for the de- 
cision. The function of science is to ascertain 
what these causes are. All that we know thus 
far is that every man is what he is because of 
the influence of environment, past or present. 
We need not here enter into the biological dis- 
putes between the Weissmannist and the Neo- 

1 Hume, with Helps to the Study of Berkeley, ch. x. In 
Huxley's Collected Essays, vol. vi, p. 220. 



FREEDOM AND NECESSITY 93 

Lamarckian ; for, whether we believe with the 
one that the only factor in progress is the power 
of natural selection to transmit and strengthen 
congenital characteristics, or with the other that 
acquired characteristics are also inherited, we 
are dealing in each case with the operation of 
some form of past environment. Neither 
Weissmannists nor Neo-Lamarckians deny the 
obvious fact of the influence of present environ- 
ment on the individual as such. 

Since, therefore, man, like everything else, is 
what he is because of his environment, past and 
present, — that is, the environment of his ances- 
tors as well as his own, — it is clear that, if we 
knew all the facts of his past and present envi- 
ronment, we should be in a much better posi- 
tion to foretell with some degree of precision 
the actions of every human being. Although a 
man is free to steal or not to steal, we are even 
now safe in predicting that under ordinary cir- 
cumstances an honest man will not steal. His 
congenital and acquired characteristics are such 
that under certain conditions he will always 
elect a certain course of action. In the case of 
physical environment the matter is very simple. 
While an Eskimo may be perfectly free to go 
naked, it is not a violent stretch of the fancy to 



94 ECONOMIC INTERPRETATION 

assume that no sane Eskimo will do so as long 
as he remains in the Arctic regions. When 
we leave the physical and come to the social 
environment, as we necessarily do in dis- 
cussing the doctrine of economic interpre- 
tation, the essence of the matter is not much 
changed. 

The theory of social environment, reduced to 
its simplest elements, means that, even though 
the individual be morally and intellectually free 
to choose his own action, the range of his 
choices will be largely influenced by the cir- 
cumstances, traditions, manners and customs of 
the society about him. I may individually be- 
lieve in polygamy and may be perfectly free to 
decide whether to take one or two wives ; but 
if I live outside of Utah, the chances are very 
great that I shall be so far guided in my decis- 
ion by the law and social custom as to content 
myself with one spouse. The common saying 
that a man's religion is formed for him affords 
another illustration. The son of a Mohamme- 
dan may elect to become a Christian, but it is 
safe to predict that for the immediate future 
the vast majority of Turks will remain Moham- 
medans. 

The negation of the theory of social environ- 



FREEDOM AND NECESSITY 95 

ment excludes the very conception of law in 
the moral disciplines. It would render impos- 
sible the existence of statistics, jurisprudence, 
economics, politics, sociology or even ethics. 
For what do we mean by a social law ? Social 
law means that amid the myriad decisions of 
the presumable free agents that compose a 
given community there can be discovered a 
certain general tendency or uniformity of ac- 
tion, deviation from which is so slight as not to 
impair the essential validity of the general state- 
ment. In a race of cannibals the abstention by 
any one savage from human flesh will not influ- 
ence the history of that tribe; in the present 
industrial system the offer on the part of any 
one employer to double the customary wages of 
his workmen will have no appreciable effect 
upon the general relations of labor and capital. 
The controlling considerations are always the 
social considerations. At bottom, of course, 
the individual is the unit; and every individual 
may be conceived as, ideally at least, a free 
agent. But for individuals living in society 
the theories that influence progress are the 
social choices, that is, the choices of the ma- 
jority. The decision of any one individual is 
important only to the extent that his influence 



96 ECONOMIC INTERPRETATION 

preponderates with the great majority; and 
then it is no longer an individual judgment, but 
becomes that of the majority. 1 

This is the reason why the " great man the- 
ory " of history has well-nigh disappeared. No 
one, indeed, denies the value of great men or 
the vital importance of what Matthew Ar- 
nold calls the remnant. Without the winged 
thoughts and the decisive actions of the great 
leaders, the progress of the world would doubt- 
less have been considerably retarded. But few 
now overlook the essential dependence of the 
great man upon the wider social environment 
amid which he has developed. 2 

Aristotle, the greatest thinker of antiquity, 
defended slavery because slavery was at the 
time an integral part of the whole fabric of 
Greek civilization. A Jefferson would be as 
impossible in Turkey as a Pobyedonostseff 

1 For an application of this doctrine to the theory of eco- 
nomics, see an article by the present writer on " Social Elements 
in the Theory of Value " in the Quarterly Journal of Economics 
(June, 1901). 

2 In his interesting essay on " Great Men and their Environ- 
ment" Prof. William James says many things which command 
assent, especially in connection with the geographical interpreta- 
tion of history. But he misses the main point, although he hints 
at it on pp. 226-227. See The Will to believe and Other Essays 
(1897). 



FREEDOM AND NECESSITY 97 

in the United States. Pheidias is as un- 
thinkable in China as Lionardo in Canada. 
On the other hand, the effects ascribed to 
great men are often largely the result of 
forces of which they were only the chance 
vehicles. Caesar erected the Roman Empire, 
but the empire would undoubtedly have come 
ultimately with or without Caesar. Napoleon 
for the time transformed the face of Europe, 
but the France of to-day would in all probability 
have been in its essentials the same had Napo- 
leon never lived. Washington and Lincoln 
assuredly exercised the most profound influence 
on their times, but it is scarcely open to doubt 
that in the end the Revolution would have suc- 
ceeded and the Rebellion would have failed, 
even though Washington and Lincoln had 
never existed. 

While his appearance at a particular moment 
appears to us a matter of chance, the great man 
influences society only when society is ready 
for him. If society is not ready for him, he is 
called, not a great man, but a visionary or a 
failure. Just as in animal life the freak or sport 
works through natural selection as fixed by the 
environment, so in human life the great man 
can permanently succeed only if the social en- 



98 ECONOMIC INTERPRETATION 

. . . — \ 

vironment is ripe. Biologists tell us that varia- 
tion in the species is the cause of all progress, 
but that the extreme limit of successful varia- 
tion from the parent type in any one case does 
not exceed a small percentage. The great man 
represents the extreme limit of successful varia- 
tion in the human race. It is to him that pro- 
gress seems to be, and in fact often is, in large 
measure due. But we must not forget that 
even then the great mass of his characteristics 
are those of the society about him, and that he 
is great because he visualizes more truly than 
any one else the fundamental tendencies of the 
community in which his lot is cast, and because 
he expresses more successfully than others the 
real spirit of the age of which he is the supreme 
embodiment. 1 

It is, therefore, an obviously incorrect state- 
ment of the problem to assert that the theory 
of economic interpretation, or the theory of so- 
cial environment of which it is a part, is incom- 

1 An interesting attempt to study in detail the causes of the 
appearance of great men in a particular country and a particular 
field has been made by A. Odin, professor at the University of 
Sofia, in his two-volume work, Gentee des Grands Hommes (1895). 
The author devotes himself specifically to the great men in 
French literature and concludes that the social and economic 
environment, and not the force of heredity or chance, is the 
capital factor in the phenomenon. 



FREEDOM AND NECESSITY 99 

patible with the doctrine of free will. If by 
determinism we erroneously mean moral fatal- 
ism, determinism is not involved at all. 1 To 
call the general doctrine "economic determin- 
ism " as is occasionally done in France, is there- 
fore essentially erroneous. The theory of social 
environment in no way implies fatalism. Social 
arrangements are human arrangements, and hu- 
man beings are, in the sense indicated, free to 
form decisions and to make social choices ; but 
they will invariably be guided in their decisions 
by the sum of ideas and impressions which have 
been transmitted to them through inheritance 
and environment. So far as great men influ 1 
ence the march of progress, they can do so only 
to the extent that they can induce the com- 
munity to accept these new ideas as something 
in harmony with their surroundings and their 
aspirations. 

Given a certain set of conditions, the great 
mass of the community will decide to act in 
a certain way. Social law rests on the obser- 

1 The passage sometimes quoted from Marx, Das Kapital, III, 
2, p. 355, does not refer to the general problem of determinism, 
as Masaryk (Grundlagen des Marxismus, p. 232) seems to think, 
but to freedom in the sense of liberation from the necessity of 
working all day in the factory and having no time for self- 
improvement. 



ioo ECONOMIC INTERPRETATION 

vation that men will choose a course of action 
in harmony with what they conceive to be 
their welfare, and on the further observation 
that the very idea of an organized community 
implies that a majority will be found to enter- 
tain common ideas of what is their welfare. If 
the conditions change, the common ideas will 
change with them. The conditions, so far as 
they are social in character, are indeed created 
by men and may be altered by men, so that 
in last resort there is nothing fatalistic about 
progress. 1 But it is after all the conditions 
which, because of their direct action or reac- 
tion on individuals, are at any given moment 
responsible for the general current of social 
thought. 

To the extent, then, that the theory of eco- 
nomic interpretation is simply a part of the 
general doctrine of social environment, the con- 
tention that it necessarily leads to an unreason- 

1 It is impossible to speak in any but respectful terms of 
Professor James. The limits of our toleration, however, are well- 
nigh reached when we find such an extreme statement as this : 
" I cannot but consider the talk of the contemporary sociological 
school about averages and general causes the most pernicious 
and immoral of fatalisms." — See the chapter on " The Impor- 
tance of Individuals," in The Will to Believe, p. 262. This appar- 
ently shows an egregious misconception of the very nature of 
social law. 



FREEDOM AND NECESSITY 101 

ing fatalism is baseless. Men are the product 
of history, but history is made by men. 1 

1 Those interested in the discussion of this point by the 
socialists may be referred to the articles of Kautsky, Bernstein 
and Mehring in Die Neue Zeit, XVII (1899), 2, pp. 4, 150, 268 
and 845. Engels has also touched upon it several times, in his 
Anti-Duhring, in his Litdwig Fenerbach (2d ed., 1895), p. 44, and 
more fully in his letter of 1894 published in Der Sozialistische 
Akademiker (1895), p. 373, and reprinted in Woltmann, Der 
Historische Materialismus, p. 250. 



CHAPTER II 

HISTORICAL LAW AND SOCIALISM 

The second objection to the theory under 
discussion is closely related to the first The 
economic interpretation of history presupposes 
that there are historical laws. Yet this is de- 
murred to by some. 

Those, however, who deny the existence of 
historical laws are evidently laboring under a 
misapprehension. What they obviously mean 
is that the statement of some particular histori- 
cal law is false, or that the causes of some 
definite historical occurrence are so complex 
and so obscure that it is well-nigh impossible 
to frame a general explanation. But they can- 
not mean that historical laws do not exist. 
The mere fact that we have not discovered a 
law does not prove that there is none. 

For what is meant by a scientific law ? A 
law is an explanatory statement of the actual re- 
lations between facts. The processes of human 
thought enable us to classify the likenesses and 



.*' 



HISTORICAL LAW AND SOCIALISM 103 

differences in the myriad phenomena of life, 
and to subsume the unity underlying these 
differences. This unity makes itself known to 
us under the guise of a casual relation of one 
phenomenon to another. When we have suc- 
ceeded in ascertaining the relation of cause and 
effect we are able to frame the law. But our. 
inability to discover the law does not invalidate 
the fact of its existence. The relations between 
the stars existed from the beginning of time ; 
the discovery of the law which enables us to 
explain these relations is a result of scientific 
progress. 1 

What is true of the exact sciences is equally 
true of the social sciences, with the difference 
that the social sciences are immeasurably more 
complex because of the greater difficulty in iso- 
lating the phenomena to be investigated, and 
in repeating the experiments. But to deny the 
existence of social laws, for instance, simply be- 

1 This does not, of course, imply that the law possesses an 
objective existence apart from our apperceptions. A considera- 
tion of this problem belongs to the science of epistemology. 
The questions of the " Ding an sich " and of the necessary limits 
of human thought have no place in this discussion ; nor have 
they any bearing upon the particular objection here alluded to. 
For the contention in question is not that historical laws have no 
objective existence, but that there is no possibility of our framing 
an adequate explanation of causal relations. 



104 ECONOMIC INTERPRETATION 

cause some particular alleged laws may be 
convicted of unreality would be to repeat the 
errors formerly committed by some of the ex- 
tremists among the historical economists and 
not yet so infrequent as they ought to be. 
Obedience to law does not mean that the law 
causes the phenomenon to happen, — for that 
is absurd, — but simply that the law affords an 
explanation of the occurrence. 

History, however, is the record of the actions 
of men in society. It is not alone past politics, 
as Freeman said, but past economics, and past 
ethics, and past jurisprudence, and past every 
other kind of social activity. But if each phase 
of social activity constitutes the material for a 
separate science, with its array of scientific laws, 
the whole of social activity, which in its cease- 
less transformation forms the warp and woof of 
history, must equally be subject to law. All 
social activity may be regarded from the point 
of view of coexistence of phenomena or from 
that of sequence of phenomena. In the one 
case we arrive at the static laws, in the other 
at the dynamic laws. The laws of history are 
the dynamic laws of the social sciences or of 
the social science par excellence. To deny the 
existence of historical laws is to maintain that 



HISTORICAL LAW AND SOCIALISM 105 

there is to be found in human life no such thing 
as cause and effect. 



The third objection to the doctrine is its 
alleged socialistic character. To this it may 
be replied that, if the theory is true, it is utterly 
immaterial to what conclusion it leads. To 
refuse to accept a scientific law because some 
of its corollaries are distasteful to us is to be- 
tray a lamentable incapacity to grasp the ele- 
mentary conditions of scientific progress. If 
the law is true, we must make our views con- 
form to the law, not attempt to mould the law 
to our views. 

Fortunately, however, we are not reduced to 
any such alternative. For, notwithstanding the 
ordinary opinion to the contrary, there is noth- 
ing in common between the economic interpre- 
tation of history and the doctrine of socialism, 
except the accidental fact that the originator of 
both theories happened to be the same man. \ 
Karl Marx founded " scientific socialism," if by 
that curious phrase we mean his theory of sur- 
plus value and the conclusions therefrom. 
Karl Marx also originated the economic inter- 
pretation of history and thought that his own 
version of this interpretation would prove to 



io6 ECONOMIC INTERPRETATION 

be a bulwark of his socialistic theory. And 
most of his followers have thought likewise. 
Thus, Mehring tells us that " historical idealism 
in its various theological, rationalistic and 
materialistic manifestations is the conception 
of history of the bourgeois class, as historical 
materialism is that of the laboring class." * 

It is plain, however, that the two things have 
nothing to do with each other. We might 
agree that economic factors primarily influence 
progress ; we might conclude that social forces, 
rather than individual whim, at bottom make 
history; we might perhaps even accept the 
existence of class struggles ; but none of these 
admissions would necessarily lead to any sem- 
blance of socialism. Scientific socialism teaches 
that private property in capital is doomed to 
disappear; the economic interpretation of his- 
tory calls attention, among other things, to the 
influence which private capital has exerted on 
progress. The vast majority of economic 
thinkers to-day believe, as a result of this 
historical study, that the principle of private 
property is a logical and salutary result of 
human development, however much they may 
be disposed to emphasize the need of social con- 

1 Die Lessing-Legende, p. 500. 



HISTORICAL LAW AND SOCIALISM 107 

trol. The Neo- Marxists themselves — such as 
Bernstein, for instance — disagree with Marx's 
view as to the immediate future of the class 
struggle, and consider that his doctrine of the 
" impending cataclysm of capitalistic society " 
has been disproved by the facts of the half cen- 
tury which has intervened since the theory was 
propounded. Yet Bernstein would not for a 
moment abandon his belief in the economic 
interpretation of history as we have described 
it. 1 

In fact, the socialistic application of the 
economic interpretation of history is exceed- 
ingly naive. If history teaches anything at all, 
it is that the economic changes transform 
society by slow and gradual steps. It took 
centuries for feudal society to develop ; it took 
centuries for private capital to convert feudal- 
ism into modern industrial society. The char- 
acteristic mark of the modern factory system, 
still in its infancy, is the predominance of the 
individual or corporate entrepreneur on a huge 
scale, as we see it typified in the present trust 



1 In his most recent book Bernstein speaks of the " realistische 
Geschichtsbetrachtung die in ihren Hauptzugen unwiderlegt 
geblieben ist." — Zur Geschichte tmd Theorie des Sozialismus 
(2d ed., 1901), p. 285. 



108 ECONOMIC INTERPRETATION 

movement in America. To suppose that pri- 
vate property and private initiative, which are 
the very secrets of the whole modern move- 
ment, will at once give way to the collective 
ownership which forms the ideal of the social- 
ists, is to shut one's eyes to the significance of 
actual facts and to the teachings of history 
itself. 1 Rodbertus was at least more logical 
than Marx when he asserted that the triumph 
of socialism would be a matter of the dim 
future. 

Socialism is a theory of what ought to be ; 
historical materialism is a theory of what has 
been. The one is teleological, the other is 
descriptive. The one is a speculative ideal, 2 
the other is a canon of interpretation. It is 
impossible to see any necessary connection 
between such divergent conceptions. Even if 
every one of Marx's economic theories was 
entirely false, this fact alone would not in any 
degree invalidate the general doctrine of eco- 
nomic interpretation. It is perfectly possible 

1 Marx, indeed, in one passage predicts the formation of 
trusts. But he, as well as his followers, overlooks the fact that 
concentrated capital, like separated capital, can do its best work 
only under the lash of individual initiative and personal 
responsibility. 

2 The " scientific socialists " deny this, but in va 



HISTORICAL LAW AND SOCIALISM 109 

to be the stanchest individualist and at the same 
time an ardent advocate of the doctrine of eco- 
nomic interpretation. In fact, the writers who 
are to-day making the most successful applica- 
tion of economic interpretation are not socialists 
at all. We might agree with the general doc- 
trine and yet refuse to accept the somewhat 
fanciful ideals of the non-socialist Loria; we 
might agree with the general doctrine and yet 
refuse to accept the equally fanciful ideals of the 
socialist Marx. Socialism and "historical ma- 
terialism """are at bottom entirely independent 
conceptions. 

Furthermore, we must distinguish between 
the principle of economic interpretation in gen- 
eral, and some particular application of the 
principle. When the phrase " historical mate- 
rialism " is mentioned in Germany, or in so- 
cialistic circles abroad, every one at once thinks 
of Karl Marx, because he has been virtually 
the only writer in Germany to attempt a con- 
sistent explanation of history on economic 
lines. " Historical materialism " and Marxism 
have thus come to be considered synonymous. 
In other countries, however, we find many dif- 
ferent versions of the theory. To speak only 
of America, Gunton, Patten and Brooks Adams, 



no ECONOMIC INTERPRETATION 

who are by no means in thorough accord with 
each other, agree in ascribing the chief impor- 
tance to economic factors. Yet each one of 
these writers would utterly refuse to be put in 
the same category as Marx. 

We are not here concerned with the validity 
of some particular explanation of historical 
facts on economic lines. We are endeavoring 
to ascertain how far the theory of economic 
interpretation in general is tenable as a prin- 
ciple. To make the general principle stand 
or fall with some particular application would 
be narrow in the extreme. The problem of 
the truth of economic interpretation is not 
necessarily bound up with the Marxian ver- 
sion of such interpretation. Just as the Marx- 
ian economics must not be confused with 
economics in general, so the Marxian interpre- 
tation of history is by no means synonymous 
with economic interpretation in general. 

But while socialism and "historical mate- 
rialism " are thus in no way necessarily con- 
nected, it does not follow that they may not 
both be equally erroneous. All that we have 
attempted to prove here is that the falsity of 
socialism does not, of and in itself, connote the 
falsity of economic interpretation. The fact 



HISTORICAL LAW AND SOCIALISM m 

that one argument is bad does not imply that 
other arguments are good. The validity of the 
economic interpretation of history is still open 
to question and cannot be decided until after a 
study of other and far more important con- 
siderations. 



CHAPTER III 

THE SPIRITUAL FACTORS IN HISTORY 

Thus far we have set forth the theory of 
the economic interpretation of history and have 
studied some of the objections that are com- 
monly advanced. There still remain among 
the criticisms most frequently encountered two 
points which seem to be somewhat more for- 
midable. Of these perhaps the more important 
is the one that figured fourth in our original 
list, 1 — the objection, namely, that the theory 
of economic interpretation neglects the ethical 
and spiritual forces in history. 

It must be confessed, indeed, that the attempts 
thus far made by the " historical materialists " to 
meet the objection have not been attended with 
much success. 2 On closer inspection, neverthe- 

1 Supra, p. 90. 

2 This is true not only of the Germans, but of the English, 
like Bax, and of the French, like Labriola, Deville and Lafargue. 
Cf. especially Mehring, Die Lessing-Legende, p. 463, and the 
articles in Die Neue Zeit: by Bax, vol. xv, pp. 175, 685 ; by 
Kautsky, vol. xiv, p. 652, and vol. xv, pp. 231, 260 ; by Bernstein, 



SPIRITUAL FACTORS IN HISTORY 113 

less, this criticism also turns out to be in some 
respects less weighty than has often been sup- 
posed. 

For what, after all, is the realm of ethical or 
spiritual forces ? To answer this question it is 
necessary to distinguish between the existence 
of the moral law and its genesis. The fail- 
ure to draw this distinction is largely responsi- 
ble for the confusion of thought which still 
prevails. 

From the historical point of view it no longer 
admits of reasonable doubt that all individual 
ethics is the outgrowth of social forces. Moral 
actions are of two kinds, — those which directly 
affect other individuals, and those which pri- 
marily affect only one's self. In the first class, 
comprising to-day the great mass of activities 
to which we apply the term " ethical," the sanc- 
tion was originally social in character. The con- 
ception of sin or immorality is not the primary 
conception. Historically we first find crimes 
and torts, that is, offences against society as a 
whole or against the individuals comprising 

vol. xi, p. 782. Bernstein has also treated the subject in his 
more recent books. 

As to the French socialists, see Labriola, Essais sur la Con- 
ception Mattrialiste de VHistoire (1897) ; Lafargue, Idealisine 
et Materialisme (1895) ; and Deville, Principes Socialistes (1896). 

I 



ii4 ECONOMIC INTERPRETATION 

society ; it is only at a much later period that 
the idea emerges of an offence against God or 
against the moral law as reflected in one's con- 
science. When the conception of sin was once 
reached, it was indeed gradually broadened so 
as to include the other offences, until to-day 
the commission of either crime or tort involves 
a sin. But historically sins were not recog- 
nized as such before torts and crimes. 

Among brutes there is in all probability no 
such thing as morality, no conception of good 
or evil. 1 The female may protect her young 
through instinct; but to maintain that this is 
a moral action is, to say the least, premature. 
It no doubt conduces to the perpetuation of 
the species, and thus is a powerful factor in 
natural selection; but there is nothing moral 
about the action unless we are willing to apply 
the term "moral" to every act — whether instinc- 

1 The reason why it is not safe categorically to deny the exist- 
ence of morality among animals is that the older contention of 
an essential psychical difference between man and animals has 
broken down before the flood of recent investigation. Compara- 
tive biology has proved that psychological phenomena begin far 
down in animal life. Some writers even profess to find them 
among the very lowest classes of beings — so low, indeed, that 
it is even doubtful whether they belong to the animal or the vege- 
table kingdom. For a popular presentation see Binet, The Psychic 
Life of Micro-Organisms (1894). Binet's views, however, are 
not shared by the more conservative biologists. 



SPIRITUAL FACTORS IN HISTORY 115 

tive or volitional — that makes for the perma- 
nence of the species. Morality in its origin 
indeed implies utility; but utility does not 
necessarily connote morality. Even if we predi- 
cate morality of animals, however, future inves- 
tigators will no doubt explain its origin on 
very much the same lines as that of human 
morality. 

For with the institution of human society we 
are on safer ground and can trace the glimmer- 
ings of a moral development. In the primitive 
peoples that still exist in almost the lowest 
stages of savagery, the only offences that are 
recognized are even to-day offences against 
the horde or clan, that is, what we should call 
public offences or crimes. Treason, incest^ 
and witchcraft are the three great original j 
crimes that are almost universally found. 
They are offences against the community, 
because they imperil, in the estimation of 
the people, the very existence of society. At 
first there is no idea of sin apart from these 
offences. The words " good " or " bad " are in- 
variably applied only to actions affecting the 
social group. The very conception of wrong 
is a social conception. Certain actions come 
to be considered wrong because they are so- 



n6 ECONOMIC INTERPRETATION 

cially injurious. They are punished by society 
as a whole, and the cause of their punishment 
is to be found in the consciousness of society 
that they are infractions of the fundamental 
social customs which have been so laboriously 
developed. For these customs are the " teach- 
ings of mother nature drilled into countless 
generations of savage ancestors. They are 
lessons in social necessity, in social selection, 
where failure to learn or refusal to obey means 
the inevitable destruction of the social group — 
means social death." * 

What has been said of crimes applies also to 
torts. The earliest offence of the aboriginal 
savage against his comrade carried with it no 
more moral implication than does to-day the 
killing of one animal by another. Passionate 
action and retaliation were originally with men, 
as they are still with brutes, the form assumed 
by the desire for physical mastery. The animal 
struggle for existence is neither moral nor im- 
moral — it is unmoral. As soon, however, as 
the offence of man against man was taken 
notice of by society, as soon as the retaliation 
was regulated by social custom or law, the 

1 Hall, Crime in its Relation to Social Progress. Columbia 
University Studies in History, Economics and Ptiblic Law, XV 
(1902), p. 5s 



SPIRITUAL FACTORS IN HISTORY 117 

punishment was invested with a social sanc- 
tion, and the act began to be regarded as 
reprehensible. When human beings came to 
see that certain actions directed against their 
fellows were followed by social reprobation or 
by individual vengeance resting on social 
approval, it did not take long to learn that 
if they valued their existence in society they 
must refrain from such actions. In the con- 
test of man with man each individual always 
has a chance of victory; he therefore feels 
no certainty that a given act will be followed 
by any baneful consequences to him. But 
against a social group, the individual is pow- 
erless, and his opportunity for escape from 
punishment is slight. 

In the course of ages social customs grow so 
rigid that any deviation from the habitual usage 
comes to be regarded not only as peculiar but 
as positively harmful, and therefore reprehensi- 
ble. /The fear of social disapproval and the 
hope of social approval become the forces 
which lead to the original ideas of evil or good 
as applied to the social actions of the individual/ 

Whether the conception of tort or that of 
crime is the earlier historically, need not be 
discussed here. Most writers assume that 



u8 ECONOMIC INTERPRETATION 

torts precede crimes ; and it is undoubtedly 
true that many torts are gradually transformed 
into crimes. On the other hand, it is almost 
equally certain that some crimes have pre- 
ceded torts. Adultery was a crime as incest 
before it was a tort; deception was a crime 
as treason before it was a tort. However 
that may be, the point of importance for us 
is that both torts and crimes are offences 
with a social sanction, and that before this 
social sanction existed there was no such idea 
as that of sin or immorality applicable to the 
actions of man to man. 

The teachings of language itself afford a 
clear indication of the social origin of the con- 
ception of morality. The word "ethical" is de- 
rived from rjBos, which means social custom 
or usage ; just as " moral," which Cicero tells 
us 1 he coined in imitation of the Greek, is 
derived from mos, denoting precisely the same 
as rjOos. So also the German term for moral, 
sittlich, is derived from Sitte, or social usage. 
It is society which has set the original imprint 
on the very conception of morality. 

Not only is the idea of morality an historical 
product, but the content of morality changes 

1 Cicero, De Fato, cap. li. 



SPIRITUAL FACTORS IN HISTORY 119 

with the state of civilization or with the social 
class. Homicide was at one time as little im- 
moral as the killing of one animal by another 
is at present; it was simply unmoral. Even 
to-day it is not immoral if committed by a 
soldier in warfare; it becomes murder and 
sinful only when the same individual acts in 
some other capacity than that of a member of 
the army. Again, with reference to some acts 
it is not quite clear whether they are right or 
wrong. For instance, the deception practised 
by General Funston to entrap Aguinaldo is 
declared by some to be not wholly wrong 
because it scarcely, if at all, violated the social 
usages of civilized nations in warfare — pro- 
vided, that is, that we are willing to confess 
that there is a difference between civilized 
and uncivilized warfare. On the other hand, 
the looting by some of the allies of the treas- 
ures in Pekin and Tien-tsin is conceded by 
almost every one to be wrong, because it has 
recently become a custom reprobated by the 
social conscience of the most civilized peoples. 
Competition is still the rule in business life : 
economists call it neither moral nor immoral. 
But competition between members of the 
smaller social group known as the family is no 



120 ECONOMIC INTERPRETATION 

longer deemed defensible, because it has long 
since been recognized by society at large that 
social welfare would, on the whole, be furthered 
by the practice of family cooperation. The 
taking of private property without compensa- 
tion is ordinarily considered wrong ; but when 
a man's house is blown up to check a con- 
flagration, the action is neither morally nor 
legally wrong, because of the overmastering 
social considerations. 

Thus the conception of right or wrong does 
not attach invariably to any particular action, 
because the same action may, under different 
circumstances and as applied to varying social 
stages, be both right and wrong. Since social 
considerations make the social actions of the 
individual right or wrong, the idea of good or 
evil itself is a social product. 

What we have thus far said is true primarily 
of the social actions of individuals — of the 
acts of man to man. The principle, however, 
is equally applicable to the second class of 
moral actions referred to above — those, 
namely, which seem at first to affect the 
individual only. An individual, for instance, 
may be guilty of some particular practice upon 
himself, which we popularly declare to be not 



SPIRITUAL FACTORS IN HISTORY 121 

good for him, or a vice. Properly speaking, 
however, all that was originally meant was that 
it was not conducive to his physical or material 
welfare. Whiskey is not good for an ordinary 
child ; whiskey is good for an invalid. In the 
/ original conception of good there is no idea of 
I morality — of right or wrong. If an animal 
gorges itself to repletion, we do not ascribe any 
moral quality to the action. When the isolated 
savage first mutilated . himself there was no 
thought of anything right or wrong, but only 
of what might be the physical or material con- 
sequences, irrespective of the fact whether these 
consequences might be brought out by natural 
forces or by the interposition of some super- 
natural spirit or demon. 

Just as an individual called those things good 
which promoted his material welfare, so society 
called those things good which contributed to 
its continued existence. As soon as the idea of 
social advantage, however, forces itself through, 
we. reach the conception of morality. An ac- 
tion is now reprobated or admired according as 
it conduces to the social welfare; and long- 
continued custom makes the individual conform 
his actions and ideas to this social standard, i.e., 
creates in him the feeling of right or wrong. 



122 ECONOMIC INTERPRETATION 

Thus what is good physically for the indi- 
vidual becomes good morally only when the 
social test has been applied. Since this ethical 
connotation is the result of social forces, it is 
clear that acts which had originally only a 
physical significance for the individual gradu- 
ally acquired an ethical significance because of 
the assumption that they would lead to certain 
social consequences. A member of modern 
society who will continually gorge himself will 
acquire certain characteristics that will make 
him distasteful to his fellow-men, or that will 
serve as a bad example to others. In either 
case it is the social considerations that attach 
an ethical significance to what is at bottom a 
mere individual physical act. 

It is only when men have learned to live in 
society, and when they have come to fear that 
some individual practice will react upon their 
ideas or their actions in relation to other indi- 
viduals, that they learn to attribute a moral 
quality even to acts which at first blush seem 
to bear no relation to any one else. The same 
is true of the actions of men toward animals. 
The killing of an animal as such is in itself 
neither good nor bad; but cruelty to animals 
is reprobated because of the probable effects 



SPIRITUAL FACTORS IN HISTORY 123 

on the character of the human being who com- 
mits the act. Thus all acts of the individual, 
whether they seem to affect himself alone or 
others, become good or bad only as the result 
of social considerations. 

All individual morality is the outcome and 
the reflex of social morality. 1 Conscience itself, 

1 The theory of the social origin of morality has been brill- 
iantly worked out by von Ihering in the second volume of his 
masterpiece Der Zweck im Recht, 1883 (2d ed., 1886). Von 
Ihering made no attempt to apply the theory to the general 
doctrine here under consideration. In English literature the 
earliest treatment of the subject is found in Darwin's Descent of 
Man, ch. iv. For an interesting adumbration of the theory of 
the social origin of morality, cf. the brilliant but very incom- 
plete passages of W. K. Clifford in his articles " On the Scientific 
Basis of Morals " and " Right and Wrong," published originally 
in 1875 and reprinted in his Lectures and Essays II (1879), 
esp. pp. in, 112, 114, 119-123, 169, 172-173. The admirable 
work of Alexander Sutherland, The Origin and Growth of the 
Moral Instinct (1898), bases the development of morality on the 
growth of sympathy through the family. Thus he tells us that 
" from the usages that grew up within the family sprung morality ; 
from those that sprung up between the families grew law," 
II, p. 138 ; or again "true morality grows up within the family," 
II, p. 146 ; or again " moral rules as to bloodshed, honesty, truth, 
chastity are all, by birth, of family growth," II, p. 151. Sutherland 
forgets, however, that in early society it was not the family in 
the modern sense, but the horde, the clan and the tribe that 
formed the unitary social groups. Sutherland's book, neverthe- 
less, is the first one in English clearly to point out that the 
(social) utilitarian theory of ethics has nothing "low" or 
" sordid " about it, but is really compatible with the most ideal- 
istic view of the universe. For the earlier and cruder opposition 
on the part of the intuitionists, see Miss Cobbe's "Darwinism 
in Morals," Theological Review, April, 1872, pp. 188-191. 



124 ECONOMIC INTERPRETATION 

or the ability to distinguish between good and 
bad, is the historical product of social forces. 
We must therefore agree with Sutherland 
when he defines the moral instinct as " that 
unconscious bias which is growing up in human 
minds in favor of those among our emotions 
that are conducive to social happiness." 1 We 
must equally subscribe to his statement that 
"there is no foundation of any sort for the 
view maintained by Kant and Green and Sidg- 
wick, with so many others, that this inward 
sense (conscience) is innate — a supernatural, 
mysterious and unfailing judge of conduct. 
On the contrary, what society praises, the indi- 
vidual will in general learn to praise, and 
what he praises in others he will commend in 
himself." 2 

Whatever truth there may be in the intui- 
tive or transcendental theory of ethics as a 
part of the cosmic scheme, there is no doubt 
that morality as applied to human beings is 
the result of a slow unfolding, in which social 
forces have played the chief role. 

Such is the origin of the moral sense; its 
existence and activity are undoubted facts of 
human life. It exerts a profound influence on 
1 op. tit., II, p. 306. 2 Ibid., 11, p. 72. 



SPIRITUAL FACTORS IN HISTORY 125 

the individual because it is the crystallization 
of centuries of social influences. So slow, how- 
ever, has been the accumulating force of these 
influences that the individual is utterly oblivi- 
ous of its social origin and importance. But, 
although conscience exists as a separate cate- 
gory, it does not lead an entirely independent 
life. It is like instinct with animals, — ages of 
dearly bought experience have served to put an 
almost indelible imprint On animal habits, until 
a certain course of action is followed instinc- 
tively. 1 The imprint, however, is not quite in- 
delible. Just as the instinct is in its origin an 
historical product, it will inevitably be slowly 
moulded by future experiences. The instinct to 
preserve life remains ; but the particular method, 
which is instinctively followed, changes from 
time to time. The instinct persists, but its 
form is modified. So the fact of moral con- 

1 This is not the place to discuss the various theories of 
instinct. A popular discussion may be found in Alfred Russell 
Wallace's Darwinism, p. 441, and a more technical one in 
Weissmann's Essays on Heredity and in C. L. Morgan's Habit 
and Instinct. It will suffice here to quote from Romanes : " There 
is ample evidence to show that instincts may arise either by 
natural selection fixing on purposeless habits which chance to be 
profitable, so converting these habits into instincts without 
intelligence being ever concerned in the process ; or by habits, 
originally intelligent, becoming by repetition automatic." — Mental 
Evolution in Animals, p. 267. 



126 ECONOMIC INTERPRETATION 

sciousness in man and the existence of the 
ethical and spiritual life in civilized society are 
undoubted ; but the content of this moral con- 
sciousness changes with the same forces that 
originally gave it birth. 

It would, therefore, be absurd to deny that 
individual men, like masses of men, are moved 
by ethical considerations. On the contrary, all 
progress consists in the attempt to realize the 
unattainable, — the ideal, the morally perfect. 
History is full of examples where nations, like 
individuals, have acted unselfishly and have fol- 
lowed the generous promptings of the higher 
life. The ethical and the religious teachers 
have not worked in vain. To trace the influ- 
ence of the spiritual life in individual and social 
development would be as easy as it is unneces- 
sary. What is generally forgotten, however, 
and what it is needful to emphasize again and 
again, is not only that the content of the con- 
ception of morality is a social product, but also 
that amid the complex social influences that 
cooperated to produce it, the economic factors 
have often been of chief significance — that 
pure ethical or religious idealism has made 
i itself felt only within the limitations of existing 
•economic conditions. 



SPIRITUAL FACTORS IN HISTORY 127 

The material, as we have seen, has almost 
always preceded the ethical. Individual ac- 
tions, like social actions, possessed a material 
significance long before they acquired an ethi- 
cal meaning. Etymology helps us here as it 
did in the discussion of the meaning of morality 
itself. A thing was originally a good in the 
material sense in which we still speak of "goods 
and commodities"; the ethical sense of good as 
opposed to bad came much later. In popular 
parlance we still speak of a broken nail as " no 
good " without desiring to pass any moral judg- 
ment on it. The original meaning of "dear" 
was not ethical, but economic; a commodity 
may still be " dear," even if we do not love it. 
To-day we esteem somebody ; originally we put 
a money value on him {cestimare — from ces, 
money). In modern times we appreciate a 
quality ; originally we set a price on it (adpre- 
tium). Everywhere the physical, material sub- 
stratum was recognized long before the ethical 
connotation was reached. 

Since the material precedes the ethical, it will 
not surprise us to learn that the material condi- 
tions of society — that is, in the widest sense, the 
economic conditions — continually modify the 
content of the ethical conception. Let us take 



128 ECONOMIC INTERPRETATION 

a few illustrations at random. Slavery, for in- 
stance, was not considered wrong by the great 
Greek moralists, whose ethical views on many 
other topics were at least on a plane with those 
of modern times. In the same way the English 
colonists, who at home would have scouted the 
very idea of slavery, soon became in the southern 
states of America the most ardent and sincere 
advocates of the system ; even the clergymen of 
the South honestly refused to consider slavery 
a sin. Had the northern and western states 
been subjected to the same climatic and eco- 
nomic conditions, there is little doubt that, so 
far at least as they could keep themselves shut 
off from contact with the more advanced indus- 
trial civilization of Europe, they would have com- 
pletely shared the moral views of their southern 
brethren. Men are what conditions make them, 
and ethical ideals are not exempt from the 
same inexorable law of environment. 

To the ethical teachers of the middle ages 
feudal rights did not seem to be wrongs. The 
hardy pioneers of New England needed a dif- 
ferent set of virtues from those which their 
successors in a softer age have acquired; the 
attempt to subdue the Indian by love, charity 
and non-resistance would have meant not so 



SPIRITUAL FACTORS IN HISTORY 129 

much the disappearance of evil as the disap- 
pearance of the colonists. The moral ideal of 
a frontier society is as legitimate from the 
point of view of their needs as the very differ- 
ent ideal of a later stage of society. The virtue 
of hospitality is far more important in the pas- 
toral stage than in the industrial. The ethical 
relation of master to workmen under the factory 
system is not the same as under the guild 
system. The idea of honor and of the neces- 
sity of duelling as a satisfaction for its violation 
is peculiar to an aristocratic or military class ; 
with the change of economic conditions which 
make for democracy and industrialism, the con- 
tent of the conception changes. We hear much 
of the growth of international law and of the 
application of ethical principles to international 
relations. We forget that such principles can 
come into existence only when the conditions 
are ripe. Universal peace can exist only when 
one country is so powerful that it dominates 
all the others, — as in the case of imperial 
Rome, — or when the chief nations have grown 
to be on such a footing of equality that none 
dares to offend its neighbor, and the minor 
countries are protected by the mutual jealousies 
of the great powers. 



130 ECONOMIC INTERPRETATION 

Political ethics are here precisely like private 
ethics. Individual vengeance does not dis- 
appear until all the citizens are subjected to 
the power of the strong tyrant, or until the 
people are willing to abide by the decision of 
the court, because of the conviction that before 
the law they are all equal. International law 
began when economic forces in the sixteenth 
and seventeenth centuries made the first step 
toward equality by converting the heteroge- 
neous petty principalities into great nations ; 
international justice and universal peace will 
come only when the economic changes now 
proceeding apace shall have converted the 
struggling nations of the present day into a 
few vast empires, dividing among themselves, 
and gradually civilizing, the outlying colonial 
possessions, thus attaining a condition of com- 
parative economic equality. Economic equality 
among individuals creates the democratic vir- 
tues; economic equality among nations can 
alone prepare the way for international peace 
and justice. 

Thus the economic interpretation of history, 
correctly understood, does not in the least 
seek to deny or to minimize the importance of 
ethical and spiritual forces in history. It only 



SPIRITUAL FACTORS IN HISTORY 131 

emphasizes the domain within which the ethi- 
cal forces can at any particular time act with 
success. To sound the praises of mercy and 
love to a band of marauding savages would be 
futile ; but when the old conditions of warfare 
are no longer really needed for self-defence, 
the moral teacher can do a great work in 
introducing more civilized practices, which 
shall be in harmony with the real needs of 
the new society. It is always on the border 
line of the transition from the old social neces- 
sity to the new social convenience that the 
ethical reformer makes his influence felt. With 
the perpetual change in human conditions 
there is always some kind of a border line, and 
thus always the need of the moral teacher, to 
point out the higher ideal and the path of 
progress. Unless the social conditions, how- 
ever, are ripe for the change, the demand of 
the ethical reformer will be fruitless. Only 
if the conditions are ripe will the reform be 
effected. 

The moral ideals are thus continually in the 
forefront of the contest for progress. The 
ethical teacher is the scout and the vanguard 
of society; but he will be followed only if he 
enjoys the confidence of the people, and the 



132 ECONOMIC INTERPRETATION 

real battle will be fought by the main body of 
social forces, amid which the economic condi- 
tions are in last resort so often decisive. There 
is a moral growth in society, as well as in the 
individual. The more civilized the society, the 
more ethical its mode of life. But to become 
more civilized, to permit the moral ideals to 
percolate through continually lower strata of 
the population, we must have an economic 
basis to render it possible. With every improve- 
ment in the material condition of the great 
mass of the population there will be an oppor- 
tunity for the unfolding of a higher moral life ; 
but not until the economic conditions of society 
become far more ideal will the ethical develop- 
ment of the individual have a free field for 
limitless progress. Only then will it be pos- 
sible to neglect the economic factor, which may 
thenceforward be considered as a constant ; 
only then will the economic interpretation of 
history become a matter for archaeologists 
rather than for historians. 

Moral forces are, indeed, no less influential 
in human society than the legal and political 
forces. But just as the legal system, like the 
political system, conforms at bottom to the 
economic conditions, so the particular ethical 



SPIRITUAL FACTORS IN HISTORY 133 

system or code of morality has been at any 
given period very largely an outgrowth of the 
social, and especially of the economic, life. If 
by materialism we mean a negation of the 
power of spiritual forces in humanity, the eco- 
| nomic interpretation of history is really not 
materialistic. But if by economic interpreta- 
tion we mean — what alone we should mean — 
that the ethical forces themselves are essen- 
tially social in their origin and largely condi- 
tioned in their actual sphere of operation by 
the economic relations of society, there is no 
real antagonism between the economic and 
the ethical life. 

The economic interpretation of history, in 
the reasonable and moderate sense of the 
term, does not for a moment subordinate 
the ethical life to the economic life; it does 
not even maintain that in any single indi- 
vidual there is a necessary connection between 
his moral impulses and his economic wel- 
fare; above all it does not deny an inter- 
pretation of economic institutions by ethical 
or religious influences. It endeavors only to 
show that in the records of the past the moral 
uplift of humanity has been closely connected 
with its social and economic progress, and 



134 ECONOMIC INTERPRETATION 

that the ethical ideals of the community, which 
can alone bring about any lasting advance in 
civilization, have been erected on, and rendered 
possible by, the solid foundation of material 
prosperity. In short, the economic conception 
of history, properly interpreted, does not neg- 
lect the spiritual forces in history ; it seeks only 
to point out the terms on which the spiritual 
life has hitherto been able to find its fullest 
fruition. 



CHAPTER IV 

EXAGGERATIONS OF THE THEORY 

We come now to the last count in the indict- 
ment that has usually been found against the 
theory of economic interpretation. It consists 
of the objection that the theory involves us in 
absurd exaggerations. In the way that it is 
commonly put, however, this objection, even if 
true, would be beside the mark. 

It is indeed a fact that some of the enthusi- 
astic advocates of economic interpretation have 
claimed too much, or have advanced explana- 
tions which are, for the present at least, not 
susceptible of proof. Thus the most brilliant 
of the Italian economists — Achille Loria — 
has published a number of books 1 in which he 

1 One of these has been translated by Professor Keasbey under 
the title : The Economic Foundation of Society (i 899) . The origi- 
nal Italian was published in 1885, and a third edition appeared in 
1902 under the title Le Bd$i Economiche delta Costituzione Sociale. 
His other important works bearing on the same general subject 
are Analisi delta Proprieta Capitalista (1889), and his more 
recent works, La Sociologia, it Suo Compito (1901), and IlCapita- 
lismo e la Scienza (1901). 

135 



136 ECONOMIC INTERPRETATION 

has attempted to interpret a vast mass of his- 
torical phenomena from the economic point of 
view. Many of his statements are correct, and 
have been successfully defended against the 
attacks of his critics ; but some of his explana- 
tions are obviously unsatisfactory. Above all 
he has laid too much stress upon the influence 
of land in modern society and has thus, in some 
cases, injured rather than aided the general 
theory of economic interpretation, of which 
only the particular application — even if an 
admirably suggestive one — is original with 
him. 1 

Other less brilliant writers have been guilty 
of even more extreme statements. Thus some 
have sought to make religion itself depend on 
economic forces. In this contention there is 
indeed a modicum of truth. We know that 
the religion of a pastoral people is necessarily 
different from that of an agricultural commu- 
nity. Marx himself pointed out that " the neces- 

1 It is a singular testimony to the neglect of Marx's writings 
outside of Germany that so many critics in England, France and 
Italy should have hailed Loria as the originator of the doctrine 
of economic interpretation. Even Professor Keasbey is not 
entirely free from this error. See the Translator's Preface 
(p. ix) to the English edition. Loria himself, however, has made 
no such claim. See his recent book, Marx e la sua Dottrina 
(1902), esp. cap. 31 " Intorno ad alcune Critiche dell' Engels." 



EXAGGERATIONS OF THE THEORY 137 

sity for predicting the rise and fall of the Nile 
created Egyptian astronomy and with it the 
dominion of the priests as directors of agricul- 
ture." * A Russian scholar, who had no connec- 
tion with socialism, has shown that somewhat 
analogous conditions were responsible for the 
theocracies of the other Oriental nations. 2 
Hence it may be granted that there is an 
undoubted economic element in the religions 
of the past, as well as in those of the present. 8 
Perhaps the most striking attempt, however, to 
carry the theory beyond its legitimate bounds 
is that which has sought the explanation of 
Christianity itself in economic facts alone. 4 It 

1 Capital (English Translation), p. 523, note 1. 

2 Metschnikoff, La Civilisation et les Grandes Fleuves His- 
toriques, 1889. Marx, of whom Metschnikoff was entirely igno- 
rant, had said twenty years before : " One of the material bases of 
the power of the state over the small disconnected producing 
organisms in India was the regulation of the water supply." 
Capital, p. 523, note 2. Kautsky was led by this passage to study 
the conditions of the other Asiatic theocracies, and came to the 
same conclusion without knowing anything of Metschnikoff, 
whose book had appeared in the interval. See Die Neue Zeit, 
IX (1899), p. 447, note. 

3 Some of the social and economic aspects of modern religious 
movements have been emphasized by Thomas C. Hall, The 
Social Meaning of the Modern Religious Movement in England 
(1900). 

4 The economic interpretation of Christianity was first ad- 
vanced by Kautsky in " Die Entstehung des Christenthums," Die 
Neue Zeit, III (1885), pp. 481 and 529, and by Engels in his 



138 ECONOMIC INTERPRETATION 

is indeed an accepted fact nowadays that much 
of the opposition to Jesus was due to his radical 
social programme and his alleged communistic 
views; it is equally certain that the economic 
conditions of the Roman Empire favored the 
reception of these new ideas. To contend, 
however, that Christianity was primarily an 
economic movement is to ignore the function 
of the spiritual forces which we have just been 
discussing. 1 

The theory of economic interpretation has 
been applied not only to religion but even to 
philosophy. The whole movement of thought, 
for instance, which we associate with the words 
Greek philosophy, has been explained in a pon- 
derous volume as a phenomenon referable to 
essentially economic causes. 2 Eleutheropou- 

essay on " Bruno Bauer und das Urchristenthum " in the Zilricher 
Sozialdenwkrat (1882), nos. 19, 20. It was developed by 
Engels in a subsequent article in Die Neue Zeit, in 1894, by 
E. H. Schmitt, also in Die Neue Zeit, XV (1897), i, p. 412, and 
by Kautsky in the chapter on " Der urchristliche Kommunismus " 
in the first volume of Die Geschichte des Sozialismus (1895). 

1 Some of the objections have been urged by Hermann, 
Sozialistische Irrlehren von der Entstehung des Christentums, 
1899. Kohler, however, goes entirely too far in the other direction. 

2 This view was first advanced by Dr. Stillich in an article in 
Die NeneZeit, XVI, 1, p. 580. This turned out, however, to be a 
plagiarism from the lectures of a Greek Privat-Docent, at Zurich, 
mentioned in the next note. See Die Neue Zeit, XVI, 2, p. .154. 



EXAGGERATIONS OF THE THEORY 139 

los, 1 it is true, denies that he is attempting to 
prove the validity of historical materialism; for 
he claims to be a " philosopher " rather than a 
historical materialist, and he calls his theory 
the " Grecian theory of development." 2 On 
closer inspection, however, the difference be- 
tween the two doctrines is scarcely discernible ; 
for the author tells us that the "materialistic 
conception of history furnishes the key to the 
phenomenon of how the general character of 
philosophy as a Weltanschauung displays itself 
in different forms and shadings." He states 
indeed that more than this it cannot do, and 
that philosophy is also the product of the 
philosopher as an individual. " The theory of 
the economic relations of society as the cause 
of becoming can therefore be true only in the 
sense of the formal cause of development." 3 
Yet in almost every section he attempts to 
trace the connection between the particular 
philosophic theory and the economic condi- 
tions. It is needless to say that the attempt is 

1 Wirthschaft imd Philosophie, oder die Philosophie und die 
Lebens-Auffassung der jeweils Bestehenden Gesellschaft. Erste 
Abtheilung: Die Philosophie und die Lebens-Auffassung des 
Griechentums auf Grund der Gesellschaftlichen Zustande. Von 
Abr. Eleutheropoulos, 1898 (2d ed., 1900). 

2 Preface to second edition. 3 Op. cit., p. 16. 



140 ECONOMIC INTERPRETATION 

far from successful. The social philosophy of 
the Greeks is indeed an outcome of the social 
conditions, as is to be expected ; but the search 
for the ultimate principles of life and thought, 
as we find it in the greatest of the Greek think- 
ers, has no conceivable relation with the act- 
ual economic conditions. The explanations of 
Eleutheropoulos are almost always far-fetched. 

The economic interpretation of philosophy 
has not been confined to the Greek period. 
Another writer, presumably a socialist, has fur- 
nished an economic explanation of von Hart- 
mann's philosophy, on the ground that the 
German bourgeoisie is giving up its class 
consciousness. 1 It is obviously not worth 
while to discuss this seriously. 

Other more or less extreme applications of 
the theory are familiar to all. Among older 
writers that flourished before the theory itself 
was formulated, it will suffice to mention 
Alison, who ascribed the downfall of the 
Roman Empire to the monetary difficulties of 
the period, and those Spanish historians who 
made the decay of Spain turn upon the exten- 
sion of the alcavala — the general tax on sales. 
To come to more recent authors, we need but 

1 Masaryk, Die Grundlagen des Marxismus, p. 146. 



EXAGGERATIONS OF THE THEORY 141 

mention Mr. Brooks Adams 1 and Professor Pat- 
ten, 2 who, amid much that is suggestive, have 
centred their attention upon particular economic 
conditions in the history of Rome and England 
respectively, and have ascribed to these an in- 
fluence on general national development out 
of all proportion to their real significance. 

Such invalid applications of the theory, how- 
ever, do not necessarily invalidate the doctrine 
itself. We must distinguish here, as in every 
other domain of human inquiry, between the use 
and the abuse of a principle. The difference 
between the scientist and the fanatic is that the 
one sees the limitations of a principle, where the 
other recognizes none. To make any science or 
any theory responsible for all the vagaries of its 
over-enthusiastic advocates would soon result 
in a discrediting of science itself. Wise men 
do not judge a race by its least fortunate mem- 
bers; fair-minded critics do not estimate the 
value of a doctrine by its excrescences. 

It is, however, important to remember that 
the originators of the theory have themselves 
called attention to the danger of exaggeration. 
Toward the close of his career Engels, influ- 

1 The Law of Civilisation and Decay. 

2 The Developtnent of English Thought. 



142 ECONOMIC INTERPRETATION 

enced no doubt by the weight of adverse criti- 
cism, pointed out that too much had sometimes 
been claimed for the doctrine. " Marx and I," 
he writes to a student in 1890, "are partly re- 
sponsible for the fact that the younger men 
have sometimes laid more stress on the eco- 
nomic side than it deserves. In meeting the 
attacks of our opponents it was necessary for 
us to emphasize the dominant principle, denied 
by them ; and we did not always have the time, 
place or opportunity to let the other factors, 
which were concerned in the mutual action and 
reaction, get their deserts." 1 In another letter 
Engels explains his meaning more clearly : — 

" According to the materialistic view of his- 
tory the factor which is in last instance decisive 
in history is the production and reproduction 
of actual life. More than this neither Marx 
nor I have ever asserted. But when any one 
distorts this so as to read tjiat the economic 
factor is the sole element, he converts the state- 
ment into a meaningless, abstract, absurd phrase. 
The economic condition is the basis, but the 

1 This letter is printed in Der Sozialistische Akademiker, 
October i, 1895, and is quoted by Greulich, Ueber die Materi- 
alislische Geschichts-Auffassung (1897), p. 7, and by Masaryk, Die 
Gnmdlagen des Marxismus (1899), p. 104. 



EXAGGERATIONS OF THE THEORY 143 

various elements of the superstructure — the 
political forms of the class contests, and their 
results, the constitutions — the legal forms, and 
also all the reflexes of these actual contests in 
the brains of the participants, the political, 
legal, philosophical theories, the religious views 
. . . — all these exert an influence on the 
development of the historical struggles, and in 
many instances determine their form." 1 

1 " Nach materialistischer Geschichts-auffassung ist das in 
letzter Instanz bestimmende Moment in der Geschichte die Pro- 
duktion und Reproduktion des wirklichen Lebens. Mehr hat 
weder Marx noch Ich je behauptet. Wenn nun jemand das 
dahin verdreht, das okonomische Moment sei das einzig bestim- 
mende, so verwandelt er jenen Satz in eine nichtssagende, 
abstrakte, absurde Phrase. Die okonomische Lage ist die Basis, 
aber die verschiedenen Momente des Ueberbaues — politische 
Formen des Klassenkampfes und seine Resultate — Verfassungen, 
nach gewonnener Schlacht durch die siegende Klasse festgestellt, 
u. s. w. — Rechtsformen, und nun gar die Reflexe aller dieser 
wirklichen Kampfe im Gehirn der Beteiligten, politische, juristische, 
philosophische Theorien, religiose Anschauungen und deren 
Weiterentwicklung zu Dogmensystemen, liben auch ihre Ein- 
wirkung auf den Verlauf der geschichtlichen Kampfe aus und 
bestimmen in vielen Fallen vorwiegend deren Form. Es ist eine 
Wechselwirkung aller dieser Momente, worin schliesslich durch 
alle die unendliche Menge von Zufalligkeiten (d. h. von Dingen 
und Ereignissen, deren innerer Zusammenhang untereinander so 
entfernt oder so unnachweisbar ist, dass wir ihn als nicht vor- 
handen betrachten, vernachlassigen konnen) als Notwendigkeit 
die okonomische Bewegung sich durchsetzt. Sonst ware die 
Anwendung der Theorie auf eine beliebige GeSchichtsperiode ja 
leichter als die Lbsung einer einfachen Gleichung ersten Grades. 1 ' 
Der Sozialistische Akademiker (October 15, 1895), p. 351, Re- 



144 ECONOMIC INTERPRETATION 

To ascribe everything to economic changes 
is plainly inadmissible. Engels himself pointed 
out in another place that to attempt to explain 
every fact of history on economic grounds is 
not only pedantic but ridiculous. 1 Political con- 
ditions and national traditions much more 
often play an important role. To say, for in- 
stance, that Brandenburg of all the German 
states should have been selected to become the 
great power of the future solely because of eco- 

printed in Woltmann, Der Historische Materialistmis (1900), 
p. 239. Cf. also Engels' view of the importance of idealistic 
elements in a second letter of 1890 printed in the Leipziger Volks- 
zeitung (1895), no. 250 (reprinted in Woltmann, p. 243), and 
in a further letter of 1893 printed in the second edition of 
F. Mehring's Geschichte der Deutschen Sozialdemokratie, Zweiter 
Theil, p. 556. 

1 " Es wird sich kaum ohne Pedanterie behaupten lassen, dass 
unter den vielen Kleinstaaten Norddeutschlands gerade Branden- 
burg durch dkonomische Notwendigkeit und nicht auch durch 
andere Momente (vor alien seine Verwicklung, durch den Besitz 
von Preussen, mit Polen und dadurch mit internationalen politi- 
schen Verhaltnissen — die ja auch bei der Bildung der ostrei- 
chischen Hausmacht entscheidend sind) dazu bestimmt war, die 
Grossmacht zu werden, in der sich der okonomische, sprachliche 
und seit der Reformation auch religiose Unterschied des Nordens 
vom Sudem verkorperte. Es wird schwerlich gelingen, die 
Existenz jedes deutschen Kleinstaates der Vergangenheit und 
Gegenwart oder den Ursprung der hochdeutschen Lautverschie- 
bung, die die geographische, durch die Gebirge von den Sudeten 
bis zum Taunus gebildete, Scheidewand zu einem formlichen Riss 
durch Deutschland erweiterte, Skonomisch zu erklaren, ohne sich 
lacherlich zu machen." — Der Sozialistische Akademiker, loc. cit. 



EXAGGERATIONS OF THE THEORY 145 

nomic considerations, is foolish. To claim that 
every petty German principality was destined 
to live or to die for economic reasons alone, 
would be as absurd as to ascribe the difference 
between the various German dialects solely to 
economic causes. 

Thus we see the doctrine of " historical ma- 
terialism " in its crude form repudiated even by 
its founders. And it is unfortunately true that 
many " historical materialists," by the very ex- 
aggeration and vehemence of their statements, 
have brought discredit on a doctrine which, in 
a sublimated form, contains so large an element 
of truth and which has done so much for the 
progress of science. 



CHAPTER V 

TRUTH OR FALSITY OF THE THEORY 

What then shall we say of the doctrine of 
economic interpretation ? 

That its authors originally claimed too much 
for it, or at least framed the doctrine so as to 
give rise to misconception, is undoubtedly true. 
That some of its advocates have gone entirely 
too far is equally sure. And it is above all 
certain that the choice of the term " historical 
materialism " is unfortunate. The materialistic 
view of history, like the utilitarian theory of 
morals, has had to suffer more because of its 
name than because of its essence. The one is 
as little sordid as the other. 

The economic interpretation of history, cor- 
rectly understood, does not claim that every 
phenomenon of human life in general, or of 
social life in particular, is to be explained on 
economic grounds. Few writers would trace 
the different manifestations of language or 
even of art primarily to economic conditions; 

146 



TRUTH OR FALSITY OF THEORY 147 

still fewer would maintain that the various 
forms of pure science have more than a remote 
connection with social conditions in general. 
Man is what he is because of mental evolution, 
and even his physical wants are largely trans- 
formed and transmuted in the crucible of 
reasoning. The facts of mentality must be 
reckoned with. 

It is an error, 1 however, to suppose that the 
theory of economic interpretation can be set 
aside by refuting the supposed claim that the 
economic life is genetically antecedent to the 
social or the mental life. The theory makes 
no such claim. 

The whole contention as to the precedence 
in time of an assumed cause over a given effect 
is quite beside the mark. It reminds one of 
the old query as to which came first — the egg 
or the chicken. There is no longer any dis- 
pute among biologists as to the influence of 
environment. When, however, we speak of 
the transformation of a given species, we do 
not necessarily mean that the environment was 

1 Committed, for instance, by my honored colleague, Professor 
Giddings, in his interesting article, " The Economic Ages," Politi- 
cal Science Quarterly (June, 1901). Almost the same argument 
was made by Salvadori, La Scienza Econo7?iica e la Teoria deW 
Evolusione ( 1 90 1 ) , pp . 5 8-63 . 



148 ECONOMIC INTERPRETATION 

there first, and that the organism came later. 
Without the environment there can indeed 
be no change ; but without the organism there 
can also be no change. The adaptation of the 
organism to the environment simply means that 
those among the existing variations are selected 
which conduce most to the perpetuation of the 
species. If there were no existing variations 
or sports there would be no transformation. 
The fact that the variation may have existed 
before the change in environment occurs is no 
objection to the theory of adjustment of the 
organism to the environment. Although we 
say that the organism is determined by the en- 
vironment, it is quite immaterial which existed 
first. 

So it is with humanity. All human progress 
is at bottom mental progress ; all changes must 
go through the human mind. There is thus 
an undoubted psychological basis for all human 
evolution. The question, however, still remains : 
What determines the thought of humanity ? 
Even if we say that the answer is to be sought 
in the social conditions, the statement is irre- 
spective of the genetic antecedence of the so- 
cial environment to the mental life. It is quite 
true that the kernel of Marx's whole doctrine is 



TRUTH OR FALSITY OF THEORY 149 

to be found in the celebrated sentence : " It is 
not the consciousness of mankind that deter- 
mines its existence, but on the contrary its so- 
cial existence that determines its conscious- 
ness." 1 However extreme this statement may- 
be on its purely philosophical side, it is not 
open to one criticism so frequently advanced; 
it does not necessarily imply that the social 
existence comes first, and the consciousness 
afterwards. Such an implication is as unwar- 
ranted as it would be in the analogous doctrine 
of biology; when biologists tell us that the 
organism is determined by the environment 
they do not necessarily make any hypothesis 
as to the priority of the one to the other. 
The whole question of genetic antecedence is 
unimportant. 

Of far more significance, however, is the 
criticism based on the alleged insufficiency of 
the economic factor to explain the changes in 
social life in general. There is little doubt 
that the extreme advocates of "historical ma- 
terialism " have laid themselves open to attack 

1 " Es ist nicht das Bewusstsein der Menschen, das ihr Sein, 
sondern ihr gesellschaftliches Sein, das ihr Bewusstsein bestimmt." 
— Marx, Zur Kritik der Politischen Oekonomie, Vorwort, p. v. 
The whole controversy of Hollitscher, Das Historische Gesetz 
(1901), pp. 93 et seq., misses the real point. 



150 ECONOMIC INTERPRETATION 

from philosophers and historians alike. They 
have sometimes seemed to claim that all sociol- 
ogy must be based exclusively on economics, 
and that all social life is nothing but a reflex of 
the economic life. 1 No such claim, however, 
can be countenanced, and no such claim is 
made by the moderate advocates of the theory. 
The claim cannot be countenanced for the 
obvious reason that economics deals with only 
one kind of social relations, and that there are 
as many kinds of social relations as there are 
classes of social wants. We have not only 
economic wants, but also moral, religious, jural, 
political and many other kinds of collective 
wants ; we have not only collective wants, but 
individual wants, like physical, technical, aes- 
thetic, scientific, philosophical wants. The 
term " utility," which has been appropriated by 
the economist, is not by any means peculiar to 
him. Objects may have not only an economic 
utility, but a physical, aesthetic, scientific, tech- 
nical, moral, religious, jural, political or philo- 
sophical utility. The value which is the 
expression of this utility and which forms the 

1 Among these extremists must be classed Loria, who has 
advanced his views most clearly in his interesting work La Socio- 
logia. In this he seeks to distinguish an economic sociology 
from the biologic or psychologic sociology of other writers. 



TRUTH OR FALSITY OF THEORY 151 

subject-matter of economics is only one sub- 
division of a far greater class. For all the 
world is continually rating objects and ideas 
according to their aesthetic, scientific, technical, 
moral, religious, jural, political or philosophical 
value, without giving any thought to their eco- 
nomic value. So far as utility and value are 
social ijpL character, that is, so far as they depend 
upon the relation of man to man, they form 
the subject-matter of sociology. Economics 
deals with only one kind of social utilities or 
values and can therefore not explain all kinds 
of social utilities or values. The strands of 
human life are manifold and complex. 1 

1 An interesting criticism of " historical materialism " from 
this point of view and with especial reference to the influence of 
economics on law is made by Rudolf Stammler, Professor of Law 
in Halle, in his rather ponderous work, Wirthschaft tmd Recht 
nach der Materialistischen Geschichtsauffasstmg (1896). Stamm- 
ler is far fairer to Marx than most of the opponents of the 
theory. He considers the attempt of Marx as in many ways 
a most remarkable one and deserving of high praise; but he 
nevertheless objects to the theory as unfinished and not com- 
pletely thought out. Stammler does not contend that no 
monistic explanation of social life is possible. In fact his own 
synthesis is constructed on teleological lines — an explanation 
which regards all past social life in the light of social purposes or 
a social ideal. With special reference to the relation between 
law and economics, he defines social life as a " common activity 
regulated from without " (ein ausserlich geregeltes Zusammen- 
wirken), and maintains that these external rules govern at once 
the legal, political, economic and other social relations. It is un- 



152 ECONOMIC INTERPRETATION 

In this aspect, what is untrue of the individ- 
ual cannot be true of the group of individuals. 
We have passed beyond the time when it 
was incumbent to explain the fallacy lurking 
in the phrase " the economic man." There is 
indeed an economic life and an economic mo- 
tive — the motive which leads every human 
being to satisfy his wants with the least outlay 
of effort. But it is no longer necessary to show 
that the individual is impelled by other motives 
than the economic one, and that the economic 
motive itself is not everywhere equally strong, 
or equally free from the admixture of other 
influences. A full analysis of all the motives 
that influence men, even in their economic life, 
would test the powers of the social psycholo- 
gist. There is no "economic man," just as 
there is no " theological man." The merchant 
has family ties just as the clergyman has an 
appetite. 

The wealth which forms the subject-matter 
of economic activity can be increased only 
through the multiplication of commodities ; 
but this multiplication can take place only in 

philosophical, then, so he tells us, to claim that any one set of 
social relations is the general cause or explanation of other social 
relations. They are all the common product of the same cause. 



TRUTH OR FALSITY OF THEORY 153 

connection with an increased demand. In- 
creased demand, however, means a diversifica- 
tion, of wants. The things wanted by an 
individual depend in last resort on his aesthetic, 
intellectual and moral condition. The eco- 
nomic life is thus ultimately bound up with the 
whole ethical and social life. Deeper than is 
often recognized is the meaning of Ruskin's 
statement, " There is no wealth but life," and 
of his further claim, " Nor can any noble thing 
be wealth except to a noble person." The goal 
of all economic development is to make wealth 
abundant and men able to use wealth correctly. 

If society, then, is an aggregation of individ- 
uals, and if history is the record of the activities 
of the social group and its constituent elements, 
history is the parti-colored garb of humanity. 

In one sense, accordingly, there are as many 
methods of interpreting history as there are 
classes of human activities or wants. There is 
not only an economic interpretation of history, 
but an ethical, an aesthetic, a political, a jural, 
a linguistic, a religious and a scientific inter- 
pretation of history. Every scholar can thus 
legitimately regard past events from his own 
particular standpoint. 

Nevertheless, if we take a broad view of hu- 



154 ECONOMIC INTERPRETATION 

man development, there is still some justifica- 
tion for speaking of the economic interpretation 
of history as the important one, rather than of 
an economic interpretation among other equally 
valid explanations. The broad reasons which 
lead to this conclusion may be summed up 
as follows. 

Human life has thus far not been exempt 
from the inexorable law of nature, with its 
struggle for existence through natural selection. 
This struggle has assumed three forms. We 
find first the original struggle of group with 
group, which in modern times has become the 
contest of people with people, of nation with 
nation. Secondly, with the differentiation of 
population there came the rivalry of class with 
class : first, of the sacerdotal with the military 
and the industrial class ; later, of the moneyed 
interest with the landed interest ; still later, of 
the labor class with one or all of the capitalist 
classes. Thirdly, we find within each class 
the competition of the individuals to gain the 
mastery in the class. These three forms of 
conflict are in last resort all due to the pressure 
of life upon the means of subsistence; indi- 
vidual competition, class competition and race 
competition are all referable to the niggard- 



TRUTH OR FALSITY OF THEORY 155 

liness of nature, to the inequality of human 
gifts, to the difference in social opportunity. 
Civilization indeed consists in the attempt to 
minimize the evils, while conserving the bene- 
fits of this hitherto inevitable conflict between 
material resources and human desires. As 
long, however, as this conflict endures, the pri- 
mary explanation of human life must continue 
to be the economic explanation — the explana- 
tion of the adjustment of material resources to 
human desires. This adjustment may be modi- 
fied by aesthetic, religious and moral, in short, 
by intellectual and spiritual forces ; but in last 
resort it still remains an adjustment of life to 
the wherewithal of life. 

When a more ideal economic adjustment is 
finally reached — that is, when science shall 
have given us a complete mastery over means 
of production, when the growth of population 
shall be held in check by the purposive activ- 
ity of the social group, when progress in the 
individual and the race shall be possible with- 
out any conflict except one for unselfish ends, 
and when the mass of the people shall live as 
do to-day its noblest members — then, indeed, 
the economic conditions will fall into the back- 
ground and will be completely overshadowed 



156 ECONOMIC INTERPRETATION 

by the other social factors of progress. But 
until that period is reached, the economic con- 
ditions of the social group and of the mass 
of individuals must continue to retain their 
ascendency. 

From the beginning of social life up to 
the present the rise, the progress and the 
decay of nations have been largely due to 
changes in the economic relations, internal 
and external, of the social groups, even though 
the facility with which mankind has availed 
itself of this economic environment has been 
the product of intellectual and moral forces. 
While the study of the economic factors alone 
will manifestly not suffice to enable us to 
explain all the myriad forms in which the 
human spirit has clothed itself since history 
began, it is none the less true that so long as 
the body is not everywhere held in complete 
subjection to the soul, so long as the struggle 
for wealth does not everywhere give way to 
the struggle for virtue, the social structure 
and the fundamental relations between social 
classes will be largely shaped by these over- 
mastering influences, which, whether we ap- 
prove or deplore them, still form so great a 
part of the content of life. 



TRUTH OR FALSITY OF THEORY 157 

Human activity is indeed the activity of 
sentient beings, and, therefore, the history of 
mankind is the history of mental development ; 
but human life depends upon the relation be- 
tween the individual and his environment. In 
the struggle that has thus far gone on between 
individuals and groups in their desire to make 
the best of their environment, the paramount 
considerations have necessarily been economic 
in character. The view of history which lays 
stress on these paramount considerations is 
what we call the economic interpretation of 
history. They are not the exclusive considera- 
tions, and in particular instances the action 
and reaction of social forces may give the 
decisive influence to non-economic factors. 
Taking man, however, for what he has thus 
far been and still is, it is difficult to deny that 
the underlying influence in its broadest aspects 
has very generally been of this economic char- 
acter. The economic interpretation of history,' 
in its proper formulation, does not exhaust the 
possibilities of life and progress; it does not 
explain all the niceties of human development ; 
but it emphasizes the forces which have hitherto 
been so largely instrumental in the rise and 
fall, in the prosperity and decadence, in the 



158 ECONOMIC INTERPRETATION 

glory and failure, in the weal and woe of na- 
tions and peoples. It is a relative, rather than 
an absolute, explanation. It is substantially- 
true of the past; it will tend to become less 
and less true of the future. 



CHAPTER VI 

FINAL ESTIMATE OF THE THEORY 

If we ask, in conclusion, what importance 
shall be assigned to the theory of economic 
interpretation, we must consider it from two 
different points of view. 

From the purely philosophical standpoint, it 
may be confessed that the theory, especially in 
its extreme form, is no longer tenable as the 
universal explanation of all human life. No 
monistic interpretation of humanity is possible, 
or, at all events, none will be possible until that 
most difficult of all studies — sociology — suc- 
ceeds in finally elaborating the laws of its exist- 
ence and thus vindicating its claim to be a real 
science. As a philosophical doctrine of uni- 
versal validity, the theory of " historical mate- 
rialism " can no longer be successfully defended. 

But in the narrower sense of economic inter- 
pretation of history — in the sense, namely, that 
the economic factor has been of the utmost im- 
portance in history, and that the historical 

iS9 



160 ECONOMIC INTERPRETATION 

factor must be reckoned with in economics — the 
theory has been, and still is, of considerable sig- 
nificance. What is this significance to eco- 
nomics as well as to history ? 

In economics the old controversy as to the 
respective merits of the deductive and the in- 
ductive methods has been laid to rest. It is 
now recognized that both methods are legitimate 
and even necessary. The older antagonism to 
the quest for natural law in economics is now 
seen to be due to a confusion of thought and 
to a mistaken identification of natural law 
with immutable precepts. When the earlier 
writers spoke of the law of free trade, or of the 
inexorable law of laissez faire, they did not use 
the term " law " in the sense of scientific law, 
or a statement of the necessary relations be- 
tween facts. Yet this is the only sense in 
which the term is properly employed. The 
removal of the older teleological connotation 
has left the conception of natural law in eco- 
nomics as innocent and as valuable as it is in 
any so-called pure science. While the explana- 
tion of what actually exists, however, forms an 
undoubted part of all science, the study of how 
these things have come to be what they are is 
perhaps of more importance in the social disci- 



FINAL ESTIMATE OF THE THEORY . 161 

plines than in all others. The realization of 
the fact that social institutions are products of 
evolution, and that they thus form historical 
and relative categories, instead of being abso- 
lute categories, is the one great acquisition of 
modern economics, which differentiates it toto 
ccelo from that of earlier times. 

The acceptance of the principle of growth 
and of historic relativity is due to several 
causes. The historical school of jurisprudence 
in Germany, under Savigny and Eichhorn, 
did much to prepare men's minds for the re- 
ception of what now seems an obvious truth in 
legal science. The historical school of econo- 
mists, under Roscher, Hildebrand and Knies, 
did more to familiarize the public with the 
newer conception. The influence of Darwin 
and the application of Darwinian methods to 
social science by Spencer and Wallace did still 
more to reenforce the idea of growth by the 
doctrines of evolution and natural selection. 
The jurisconsults, however, confined themselves 
to law, the historical economists, at the begin- 
ning at least, did not realize the connection 
between the economic and the wider social life, 
and the Darwinians came on the scene at a 
later date. Comte, indeed, influenced no doubt 



162 ECONOMIC INTERPRETATION 

by Saint-Simon, had called attention to the 
relation between economics and sociology, but 
his own fund of economic knowledge was ex- 
ceedingly slight. Long before Spencer wrote, 
Karl Marx, in a way undreamt of by the his- 
torical economists and unrecognized by Comte, 
not only stated that every economic institution 
is an historical category, but pointed out in a 
novel and fruitful way the connection between 
economic and social facts. 

It is always hazardous to ascribe a complex 
change of thought to simple causes, and there is 
no doubt that the newer stream of economic 
thought is due to various currents of influence; 
but it is safe to predict that when the future his- 
torian of economics and social science comes to 
deal with the great transition of recent years, he 
will be compelled to assign to Karl Marx a far 
more prominent place than has hitherto been 
customary outside of the narrow ranks of the 
socialists themselves. In pure economic theory 
the work of Karl Marx, although brilliant and 
subtle, will probably live only because of its 
critical character ; but in economic method and 
in social philosophy, Marx will long be remem- 
bered as one of those great pioneers who, even 
if they are not able themselves to reach the 



FINAL ESTIMATE OF THE THEORY 163 

goal, nevertheless blaze out a new and prom- 
ising path in the wilderness of human thought 
and human progress. The economic interpre- 
tation of history, in emphasizing the historical 
basis of economic institutions, has done much 
for economics. 

On the other hand, it has done even more for 
history. It has taught us to search below the 
surface. The great-man theory of history, 
which was once so prevalent, simplified the 
problem to such an extent that history was in 
danger of becoming a mere catalogue of dates 
and events. The investigation of political and 
diplomatic relations indeed somewhat broad- 
ened the discipline and for a long time occu- 
pied the energies of the foremost writers. The 
next step in advance was taken when, under 
the influence of the school of historical juris- 
prudence, more attention was paid to the rela- 
tions of public law, and when political progress 
was shown to rest largely on the basis of con- 
stitutional history. The study of the develop- 
ment of political institutions gradually replaced 
that of the mere record of political events. 
Legitimate and indispensable as was this step, 
it did not go far enough. Those writers, still 
so numerous, who understand by history pri- 



1 64 ECONOMIC INTERPRETATION 

marily constitutional history, show that they 
only half comprehend the condition and the 
spirit of modern historical science. 

The newer spirit in history emphasizes not 
so much the constitutional as the institutional 
side in development, and understands by insti- 
tutions, not merely the political institutions, 
but the wider social institutions of which the 
political form only one manifestation. The 
emphasis is now put upon social growth, and 
national as well as international life is coming 
more and more to be recognized as the result 
of the play and interplay of social forces. It is 
for this reason that history is nowadays at 
once far more fascinating and immeasurably 
more complicated than was formerly the case. 
History now seeks to gauge the influence of 
factors some of which turn out to be exceed- 
ingly elusive. It attempts to introduce into the 
past the outlines of a social science whose very 
principles have not yet been adequately and 
permanently elaborated. 

Whatever be the difficulties of the task, how- 
ever, the new ideal is now more and more 
clearly recognized. In the formulation of this 
new ideal the theory of economic interpretation 
has played an important, if not always a con- 



FINAL ESTIMATE OF THE THEORY i6j 

sciously recognized, role. It is not that the 
historian of the future is to be simply an eco- 
nomic historian, for the economic life does not 
constitute the whole of social life. It is, however, 
the theory of economic interpretation that was 
largely responsible for turning men's minds to 
the consideration of the social factor in history. 
Marx and his followers first emphasized in a 
brilliant and striking way the relation of certain 
legal, political and constitutional facts to eco- 
nomic changes, and first attempted to present a 
unitary conception of history. Even though it 
may be conceded that this unitary conception 
is premature, and even if it is practically certain 
that Marx's own version of it is exaggerated, if 
not misleading, it is scarcely open to doubt that 
through it in large measure the ideas of his- 
torians were directed to some of the momen- 
tous factors in human progress which had 
hitherto escaped their attention. Regarded 
from this point of view the theory of economic 
interpretation acquires an increased signifi- 
cance. Whether or not we are prepared to 
accept it as an adequate explanation of human 
progress in general, we must all recognize the 
beneficent influence that it has exerted in stim- 
ulating the thoughts of scholars and in broad- 



166 ECONOMIC INTERPRETATION 

ening the concepts and the ideals of history 
and economics alike. If for no other reason, it 
will deserve well of future investigators and 
will occupy an honored place in the record of 
mental development and scientific progress. 



PROGRESSIVE TAXATION. 

BY 

EDWIN R. A. SELIGMAN, 

Professor of Political Economy and Finance, Columbia University. 

8vo. Paper. $1.00. Cloth. $1.50. 

{AMERICAN ECONOMIC ASSOCIATION PUBLICATIONS^ 



COMMENTS. 



" Its full and scholarly discussion must prove extremely useful." 

— The Critic, July, 1894. 

" Professor Seligman is probably the greatest authority on this im- 
portant but intricate subject that we have in this country." 

— Philadelphia Call, June, 1894. 

"The author is considerate of opposing theories, slow to condemn, 
kindly, genial, scholarly, and judicious." — Social Economist, July, 1894. 

" A marvellously complete account of the development. . . . The 
thread of the argument is never lost, and the criticisms of this vast 
mass of literature are so clearly thought out and so convincingly pre- 
sented that this writer about authorities clearly establishes his own 
position as an authority second to no other. It is a magnificent piece 
of work." — The Outlook, November, 1895. 

FOREIGN COMMENT. 

" Professor Seligman's masterly series of studies." 

— The Economic Jotirnal, London, 1894. 

"A remarkable work." 

— National-Okonomisk Tidskift, Copenhagen, 1895. 

"The best and most comprehensive work on the subject that exists 
in any language." — Finanz-Archiv, Stuttgart, 1896. 

" Most notable for the precision and the dispassionate impartiality 
of its criticisms." — L 1 Idea Liberate, Milan, January, 1896. 



THE MACMILLAN COMPANY, 

66 FIFTH AVENUE, NEW YORK. 



ESSAYS IN TAXATION. 

BY 

EDWIN R. A. SELIGMAN, 

Professor of Political Economy and Finance, Columbia University. 

Third Edition, 1900. 

8vo. Cloth, gilt top. $3.00 net. 



COMMENTS. 

" Replete with information. Every chapter bears witness to the 
profundity of his erudition and to the strength of his devotion to his 
theme." — The Independent, March, 1896. 

" A clear-headed man, with a perspicuous style. He explains the 
difficult subject of taxation so that any man with an attentive mind can 
understand him." — Boston Evening Transcript, February, 1896. 

" A very careful study. The author seems to have but few if any 
hobbies, and only aims to reach wise conclusions upon questions so 
little understood by even our lawmakers." 

— Chicago Inter-Ocean, November, 1895. 

" Essays whose solidity, vigor, and accuracy have challenged admira- 
tion. ... A book which is capable of holding its own with the best 
writings in the better known languages. — The Nation, February, 1896. 

" No one has investigated the subject with more thorough or with 
more brilliant success. . . . Should find its way into the hands of any 
citizen who loves his country." — The Sewanee Review, May, 1896. 

"The present volume is, if anything, superior to any of his previous 
works. His broad and accurate scholarship, his scientific method, his 
clearness and fulness, and at the same time compactness, of statement 
are here shown to good advantage." 

— Boston Commonwealth, December, 1895. 

" By far the best writer on American taxation. His work is among 
the very strongest in any country. With such scholarly leadership re- 
form may come in a conservative and rational rather than in a revolu- 
tionary way." — Bibliotheca Sacra, Chicago, 1896. 

" No student of finance will feel that he has a right to an opinion until 
he has read whatever Professor Seligman may have written. . . . The 
volume constitutes the most important contribution to the science that 
has yet appeared." — Annals of the American Academy, March, 1896. 



THE MACMILLAN COMPANY, 

66 FIFTH AVENUE, NEW YORK. 



ESSAYS IN TAXATION. 



FOREIGN COMMENT. 

" A gratifying instance of the vitality and vigour of one of the oldest 
and greatest of American universities, in a department where, it is to 
be hoped, these bodies may some day be rivalled by Oxford and Cam- 
bridge." — The Speaker (London), July, 1896. 

" One of the few economists who have influenced the politicians. 
Every one will feel the reason of this influence; there is a fine grasp of 
principles; there is a close contact with facts; there is a constant test- 
ing of the one by the other." — Nature (London), March, 1896. 

" His ability and knowledge are beyond dispute. He does not allow 
the stores of his erudition to encumber his reasoning. The student 
owes a special debt of gratitude to the author who, while careful to 
ascertain and to present the facts, is able also to bring out their mean- 
ing with lucidity and emphasis." — The Economic Journal, March, 1896. 

"A remarkable series of essays which have secured for him a position 
of the highest eminence amongst the writers, both in Europe and 
America. The student will feel scarcely less grateful for the frankness 
and courage with which the author states his conclusions, than for the 
knowledge and skill with which he seeks for the solution of the prob- 
lems." — Newcastle Daily Chronicle, July, 1896. 

" So simple, so fresh, and so penetrating that it is scarcely credible 
how in other countries so much empty abstraction and foggy erudition 
are wasted on the subject. America, you are more fortunate than 
we." — Die Zeit (Vienna), 1896. 

"The author, thanks to his world-wide erudition, possesses a range 
of view superior to that of any other living writer on finance." — Jahr- 
buch fur Gesetzebung Verwaltung und Volkswirthschaft (Leipzig), 
1896. 

"The author is distinguished not only in America, but in the wider 
world of international scientific literature, for his exquisite grasp of 
method, as well as for his happy mental equilibrium. His works teem 
with fine analysis and penetrating investigations; they abound in sim- 
ple and acute discussions; they are noteworthy for their erudition and 
the novelty of their views. The book richly deserves all the praise 
that has been accorded to it in so many quarters." 

— Giornale degli Economisti (Rome), May, 1896. 



THE MACMILLAN COMPANY, 

66 FIFTH AVENUE, NEW YORK. 



THE SHIFTING AND INCIDENCE OF 
TAXATION. 

BY 

EDWIN R. A. SELIGMAN, 

Professor of Political Economy and Finance, Columbia University. 

Second Edition, 1899. 

8vo. Cloth, gilt top. $3.00 net. 



COMMENTS. 

" The most scholarly work that has yet appeared in America." 

— Christian Union (The Outlook), 1892. 

" One of the most brilliant contributions America has made to finance. 
Its solidity, logical analysis, clearness of statement, and general scien- 
tific soundness cannot fail to procure for it a high place in economic 
literature." — Annals of the American Academy, 1893. 

" In firm grasp of fundamental principles, masterly power of analysis, 
and clearness of statement, Professor Seligman cannot be excelled." 

— N. Y. Commercial Advertiser, 1899. 

"The new edition does high honor to the Columbia Series. . . . 
Since its appearance no important work has been published in any 
country which has not paid deference to the scholarship displayed in 
the volume." — Annals of the American Academy, 1899. 

FOREIGN NOTICES. 

" Always stimulating and suggestive." — The Saturday Review, 1899. 

" A model of compactness and lucidity." 

— The Guardian (London), 1899. 

" The most important work of the foremost living authority on taxa- 
tion." — Newcastle Leader, 1899. 

" One of the best treatises on the subject, and certainly the most 
complete." — Journal des Ecoiiomistes (Paris), 1893. 

"A valuable study which deserves a place among the best works on 
the subject." — Z' Economista (Florence, Italy), 1893. 

" A second edition of a work on such a topic is exceedingly rare. In 
this case the success is completely justified. ... It is not only the 
best of all existing treatises on the subject, but it may in fact be de- 
clared to be a literary and scientific masterpiece." 

Jahrbiicher fur JVationaloehonomie (Jena), 1 900. 



THE MACMILLAN COMPANY, 

66 FIFTH AVENUE, NEW YORK. 



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